Oil extended losses in Asian trade today, hovering around $77 a barrel as waning consumer confidence in the United States affected investors' appetite.
New York's main contract, light sweet crude for delivery in September, was down 43 cents to $77.07 a barrel in morning trade.
London's Brent North Sea crude for September dipped 35 cents to $75.78 a barrel.
"Falling consumer confidence (in the United States) and the growing likelihood of a double-dip in house prices have put a further dent in the already deteriorating outlook for consumption growth," research house Economics said.
"Without consumers on board, the economic recovery is looking dangerously vulnerable."
The United States is the world's biggest economy and the largest energy consuming nation.
Oil prices tumbled in US trade yesterday after a closely-watched survey showed that American consumer confidence plunged to its worst level in five months on concerns over unemployment amid an uncertain economic outlook.
The Conference Board, a business research firm, said its consumer confidence index, which had declined sharply in June, retreated further this month.
The index fell to 50.4 points from 54.3 last month, based on a survey of 5,000 US households and is now at its lowest level since February, the board said.
"It appears that lower equity prices, signs of a slowdown in activity and fears that the jobs recovery is fading have wiped out the previous optimism," Capital Economics added.
"Overall, with consumers so glum and the woes of the housing market far from over, it is clear that GDP (gross domestic product) growth will slow in the second half of the year, as private sector demand fails to compensate for the fading of the fiscal stimulus."
Troubles in the US housing market sparked a financial firestorm that swept across the world in late 2008 and led to a global recession that lasted well into 2009.
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