Oil prices hold under 76 dollars

World oil prices firmed on Friday but held under 76 dollars amid stubborn concerns over the global economic recovery despite upbeat growth data in Europe, analysts said.

Brent North Sea crude for delivery in September added 30 cents to 75.82 dollars a barrel in early afternoon London trade.

New York’s main contract, light sweet crude for September, gained 17 cents to 75.91 dollars.

Oil had slumped by more than two dollars on Thursday, dropping sharply for the third straight day amid market fears that the global recovery could slow sharply.

“Oil prices are very clearly at the mercy of pessimistic macroeconomic sentiment, losing over five dollars in just three days,” said Barclays Capital analyst Amrita Sen.

“With sentiment having taken a significant turn for the worse, oil prices remain under considerable pressure, with even some extremely strong European figures failing to boost confidence.”

Data Friday showed that the German economy grew 2.2 percent in the second quarter of 2010, the biggest quarterly expansion since reunification.

In addition, economic growth across Europe’s core euro currency zone hit 1.0 percent in the second quarter.

Other data showed that the French and Spanish economies also expanded in the April-June period, with modest growth of 0.6 percent and 0.2 percent respectively.

“The choice of the oil market soundtrack has clearly become a bit extreme, clinging on to the events of the past and haunted by the mere notion of slowdown,” Sen said of the data.

Global markets were battered this week, triggered by a warning Tuesday by the US Federal Reserve that US recovery would be weaker than anticipated, forcing investors onto the defensive.

Slowing growth in China, the Asian powerhouse which has kept the global economy above water in the past 18 months, added to the damage.

The United States and China are the world’s top two energy-consuming nations.

On Thursday, a surprise rise in the new US weekly jobless benefit claims added to increasing gloom over the economic outlook, with investors looking for safety as risks to growth mount.

Meanwhile on Friday, the Organization of Oil Exporting Countries (OPEC) revised upwards its world oil demand growth estimate for 2010 to 1.2 percent.

“Given stabilised oil demand in the US, the world oil demand growth forecast is revised up by 0.1 million barrels per day (bpd) to show growth of 1.05 million bpd or 1.2 percent,” the cartel said in its monthly report.

Total demand for 2010 was now expected to reach 85.5 million bpd, up from 84.46 million bpd in 2009.

OPEC warned however that a slower economy in the second half of the year, caused by a phasing out of fiscal stimulus, would likely affect demand.