* Risk appetite wanes as Greek debt crisis drags on
* European refinery runs fall again in March - Euroilstock
* Explosion halts northern Iraq pipeline flow to Turkey
* Coming Up: German Ifo report; Friday 0800 GMT
(Recasts, updates prices, market activity; changes byline, new
dateline, previously LONDON)
By Robert Gibbons
NEW YORK, April 22 (Reuters) - Oil slipped on Thursday as
concerns about Greece's deteriorating financial situation
eroded risk appetite across global markets.
The European Union said Greece had much larger budget
deficits last year than anticipated. The cost of insuring Greek
debt hit a record high. []
The euro dropped to near one-year lows against the U.S.
dollar after Moody's cut Greece's sovereign rating by a notch
and placed the rating on review for a further possible
downgrade. []
Edward Meir, analyst at brokers MF Global, highlighted what
he saw as the potentially negative influence of the dollar on
oil.
"We would suggest that prices have gotten somewhat ahead of
the fundamentals," Meir said. "We are consequently looking for
a modest pullback over the short-term, particularly if the
dollar continues to strengthen on the back of the Greek debt
crisis."
U.S. June light crude oil futures <CLc1> dropped almost $2
per barrel to a low of $81.73 before recovering to trade at
$83.10, down 58 cents at 12:31 p.m. EDT (1631 GMT). Front-month
crude hit an 18-month high above $87 on April 6.
"Greece isn't helping the situation and the PPI number
raised eyebrows because the Fed has been concerned about
inflation, so that strengthened the dollar," said Phil Flynn,
analyst at PFGBest Research in Chicago.
U.S. producer prices rose more than expected in March on
strong consumer food and gasoline costs. []
U.S. stocks fell on the Greece news and amid weak
telecommunication sector corporate earnings. []
U.S. crude oil inventories rose unexpectedly last week, the
U.S. Energy Information Administration said on Wednesday.
Refined products stocks climbed more than forecast. []
"And the rising inventories are getting harder to sweep
under the rug and that is weighing down the front of the
market," Flynn noted.
U.S. oil prices were under pressure from the crude oil
inventory rise of 1.8 million barrels to over 34 million last
week at Cushing, Oklahoma, the landlocked delivery point for
NYMEX benchmark light sweet crude futures.
The premium of July crude over front-month June crude
hovered around $2 on Thursday <CL-1=R>. The recent
strengthening contango, where the front-month is priced lower
than the nearby month, has been the widest since December.
ICE Brent <LCOc1>, pressured less than U.S. crude futures,
was down 45 cents at $85.25 a barrel, maintaining a premium to
U.S. crude of more than $2.
North Sea crude supplies will tighten over the next month
due to offshore maintenance and Brent is also responding to
evidence of more Chinese demand, analysts say. []
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For a graphic of U.S. crude oil and Brent futures and their
recent divergence, click on:
http://graphics.thomsonreuters.com/gfx/SBrb_20102204104405.jpg
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European oil industry data added to the bearish tone with
figures from industry monitor Euroilstock showing oil refinery
output in 16 European countries fell by 10.1 percent in March
from the same month last year. []
News of an explosion early on Thursday on the Iraq-Turkey
oil pipeline which carries a quarter of Iraq's crude exports
helped curb oil's slide. []
The pipeline blast in the northern Iraqi province of
Nineveh is likely to affect oil exports via the Kirkuk to
Ceyhan pipeline for as much as a week, Iraqi officials said.
(Additional reporting by Christopher Johnson in London,
Alejandro Barbajosa in Singapore; editing by Keiron Henderson;
Editing by David Gregorio)
