* Stocks plunge, dollar firm after biggest two-year gain
* Fears rise slowdown may reduce commodities demand
* Coming up: U.S. initial jobless claims; 1230 GMT
* For a technical view, click: []
By Florence Tan
SINGAPORE, Aug 12 (Reuters) - Oil slid on Thursday for a
third straight day on mounting fears that a slowdown in global
economic recovery would cut demand for commodities.
Japan's Nikkei average hit a one-month low on Thursday
after U.S. stocks erased the year's gains in the broadest
selloff in a month-and-a-half on Wednesday. [] []
The dollar snapped recent weakness and posted its biggest
daily gain in nearly two years on Wednesday which hit oil
prices as concerns about the U.S. and global economies
triggered risk aversion.
A stronger dollar makes oil more expensive for holders of
other currencies.
"The rally (of oil prices) all the way to $83 was mostly
because of the weak dollar," said Clarence Chu, trader at
Hudson Capital.
London Brent crude <LCOc1> fell more than $1 in early
Thursday trade while U.S. crude extended its decline following
a 3 percent fall on Wednesday, its biggest drop in six weeks.
By 0251 GMT, Brent crude was at $76.88 a barrel, down 76
cents, while U.S. crude <CLc1> for September delivery fell 63
cents to $77.39 a barrel.
For a graphic showing the 24-hour oil technical outlook:
http://graphics.thomsonreuters.com/WT/20101208085818.jpg
The RJ/CRB index <.CRB> of 19 commodities, a global
benchmark for the asset sector, dropped 1.27 percent, or 3.45
points, to 268.83, its lowest level since July 30.
For a graphic, see: http://link.reuters.com/kyv37m
WEAK U.S. DEMAND
Summer gasoline demand in the U.S. was unusually weak as
official data showed on Wednesday a larger-than-expected build
in stocks in the week to Aug. 6. []
This reinforced fears about the sustainability of the
global economic recovery after the U.S. Federal Reserve issued
a downbeat outlook while trade data from China showed a gradual
slowdown. []
"From the data, it all indicates that the economic recovery
is slowing down because of the end of economic stimulus," Chu
said.
He added that the 3 million barrels drawdown in U.S. crude
stocks last week was supposed to be bullish, but the weak
economic outlook has turned the trend bearish.
However, prices are technically supported around $75, he
said.
"Let's see if the support will hold," Chu said.
(Reporting by Florence Tan; Editing by Ed Lane)
