UPDATE 2-Oil falls below $77, down $10 in the past week

                                
 * Fears of new credit crunch in Europe builds
                                
 * Anxiety up on massive sell off in Wall Street
                                
 * Coming up: U.S. non-farm payrolls, unemployment; 1230 GMT
                                
 * For a technical view, click: [ID:nSGE64600S]
 (Updates prices)
                                
 By Florence Tan
                                
 SINGAPORE, May 7 (Reuters) - Oil fell below $77 a barrel on
Friday, marking a $10 dollar fall during the past week in a
tumultuous reaction to a growing sovereign debt crisis in
Europe and more bearish global growth prospects.
                                
 Oil slid 4 percent the previous day after a suspected
trading glitch caused stocks in the United States to plunge 9
percent in the last two hours of trading on Thursday, its
biggest single intraday drop ever. However, stocks clawed back
some of the losses. [ID:nSGE646024]
                                
 U.S. crude for June delivery <CLc1> fell 31 cents to $76.80
a barrel by 0658 GMT. The contract has fallen more than 10
percent this week, its worst week since the start of 2009.
                                
 London Brent crude <LCOc1> dropped 14 cents to $79.69 a
barrel.
                                
 On Friday, the euro which had been pummeled during the week
on doubts about the sustainability of a plan to bailout
debt-stricken Greece, extended gains above $1.27 as market
players continued to cover short positions.
                                
 The euro was helped by news that Group of Seven (G7)
finance ministers will discuss efforts to get aid to Greece
later in the day. [ID:nTKW006914]
                                
 "The euro has rebounded a little, but the general market
sentiment is still bearish," said Clarence Chu, trader at
Hudson Capital in Singapore.
                                
 "The key thing to watch is the German parliament; whether
or not they will approve the bailout plan."
                                
 Another market player echoed that view.
                                
 "The euro has been under tremendous amount of pressure as a
result of a lack of confidence in the solution to European
debt," said Toby Hassall, head of research at CWA Global
Markets in Australia.
                                
 "As long as those concerns are there, the pressure will
continue."
                                
 Investors have poured money into safe haven assets such as
gold and the U.S. dollar on market uncertainty in the past
week.
                                
 The dollar could get a boost if U.S. jobs later in the day
show 200,000 jobs were added in April, up from 162,000 in
March. [ID:nN03205134].
                                
 In Asian trading, the dollar initially weakened against a
basket of currencies on Friday before recovering 0.25 percent
higher <.DXY>.
                                
 "We're expecting an encouraging piece of (U.S.) data
tonight which may provide some support to Wall Street and crude
prices, but it's certainly hard to ignore events unfolding in
Europe," Hassall said.
  <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
                                
 For a chart of oil's correlation with risk aversion, see:
http://graphics.thomsonreuters.com/gfx/NT_20100705110504.jpg
                                
 For a technical chart, see:
http://graphics.thomsonreuters.com/gfx/WT_20100705085001.jpg
                                
 For graphic on oil-dollar correlation, click on:
http://graphics.thomsonreuters.com/gfx/RSW_20100705104744.jpg
 ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
                                
 MARKETS ROUT
                                
 The dive on Wall Street sent Asian stocks sliding, with the
Nikkei average <.N225> down more than 4 percent to a two-month
low, and the Shanghai index <.SSEC> fell to a eight-month
closing low, down 6.3 percent this week. [ID:nTST000129]
                                
 Gold eased on Friday as some investors sold after it rose
toward an all-time high of 1,226.10 set in December last year,
a day ago on the euro-zone debt woes, while base metals dropped
around 1 percent in London. [GOL/]
                                
 "It's certainly been three very steep days of decline (for
oil prices). The spike in risk aversion is comparable in some
way to what we saw in 2008," CWA's Hassall said.
                                
 The VIX <.VIX>, Wall Street's so-called fear gauge, soared
31.7 percent in its largest percentage jump since September
2008 -- just after the collapse of Lehman Brothers ushered in
the darkest days of the biggest financial crisis since the
Great Depression.
                                
 The global financial crisis in 2008 sent oil prices
plunging from $147 to around $30 within five months.
                                
 Oil is also under pressure from high inventories in top
consumer the United States.
                                
 Industry data provider Genscape reported that oil stocks at
NYMEX's Cushing, Oklahoma, delivery hub are expected to rise by
another 990,795 barrels to a record of 37.8 million barrels in
the week to May 4. [ID:nNYS007953]
                                
 "We're still seeing oversupply in the U.S. market," Hassall
said, even though demand from emerging economies, particularly
China, is offering some support to oil prices.
 (Editing by Ed Lane)