LONDON: Oil prices fell as the easing cold snap in the northern hemisphere dented demand for heating fuel, traders said.

Brent North Sea crude for delivery in March fell 93 cents to 76.70 dollars a barrel in midday London trading.

New York's main contract, light sweet crude for February delivery, shed 1.06 dollars to 77.96 dollars a barrel.

Crude futures recovered Tuesday after a five-session losing streak as oil cartel OPEC had forecast modest growth in world crude demand this year.

"Oil is pulling back and it's part of the volatility," said Victor Shum, an analyst with energy consultancy Purvin and Gertz in Singapore.

"The cold weather is ending in the northern hemisphere," he said.

He added that an upcoming government report on US energy stockpiles was expected to show an increase, which would indicate weaker demand.

The inventories report is due for release on Thursday, one day later than normal owing to a US bank holiday on Monday.

"The US inventory data ... is likely to show that the demand for oil and oil products in the world's largest oil consuming country continues to be weak," added Commerzbank analyst Carsten Fritsch in a note to clients.

A strengthening greenback also weighed on oil because it makes the dollar-priced commodity more expensive to buyers who hold weaker currencies.

The euro tumbled under 1.42 dollars on Wednesday as worries mounted over the outlook for the European economy in light of weak German data and Greece's fiscal woes, dealers said.

At 0540 GMT, the European single currency plunged as low as 1.4167 dollars, which was the lowest point since August 19. It later stood at 1.4190, which compared with 1.4291 late in New York on Tuesday.

The shared European unit -- until recently favoured as a high-yielding currency -- is now being shunned in favour of the safe-haven dollar, analysts said.

Elsewhere this week, on Thursday, market participants will digest economic growth data in China, which is the world's second biggest energy consuming nation after the United States.

"We continue to see the market consolidating above 76.50 dollars ahead of the US inventory numbers tomorrow and some macro releases towards the end of the week," said VTB Capital commodities analyst Andrey Kryuchenkov.

"The market is still looking for bottom, while overall sentiment turned slightly negative with the cold snap easing in the northern hemisphere," he added.

The OPEC oil producers' cartel said Tuesday in its January report that world oil demand in 2010 was forecast to grow by 0.8 million barrels per day (bpd) to average 85.1 million bpd.

The Organization of Petroleum Exporting Countries, which is headquartered in Vienna, pumps around 40 percent of the world's oil supplies.