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NEW YORK: Oil prices sank on Tuesday after the United States said the world's largest economy grew more slowly than estimated in the third quarter, fuelling concern about energy demand.
New York's main contract, light sweet crude for January delivery, dropped 1.54 dollars to close at 76.02 dollars a barrel.
In London, Brent North Sea crude for January delivery shed 1.00 dollar to settle at 76.46 dollars.
Analysts said the oil market stumbled after the US government downwardly revised its estimate of gross domestic product - a broad measure of the nation's goods and services output - for the third quarter.
The Commerce Department said that GDP expanded at a 2.8 percent annual rate in the July-September period, down from last month's estimate of 3.5 percent growth.
The slower expansion, in line with most analysts' forecasts, was nevertheless a rebound, marking the first growth in the economy after four consecutive quarters of contraction.
"While today's GDP report met expectations, it still pared 0.7 percent from the previous quarter's performance that was enhanced by the 'cash for clunkers' programme," said Mike Fitzpatrick, analyst at MF Global.
Most economists say the US recovery from its worst recession in decades appears to be on track, but could be derailed by rising joblessness. The unemployment rate hit a 26-year high of 10.2 percent in October.
A separate survey on Tuesday showed US consumer confidence rose slightly in November after two months of declines.
Fitzpatrick said the market was bracing for the US Energy Department's inventories report on Wednesday, expected to indicate weak demand.
"This week's inventory reports should show an increase in crude oil totals and utilisation remains historically low as a consequence of squeezed margins," he said.
Bart Melek, economist at BMO Capital Markets, also predicted a build in US petroleum stockpiles.
"The weekly US data is likely to show rising crude inventories and higher product stocks as well," Melek said.
MF Global's Fitzpatrick said that traders were entering consolidation mode ahead of a long US holiday weekend that begins Thursday with Thanksgiving Day.
"From today, volumes should drop as the long holiday weekend approaches, with most trading limited to position squaring," he said. - AFP/de
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