* SEC charges Goldman Sachs with fraud over CDO
* Markets tumble on Goldman news
* Coming up: IMF, EU, ECB officials meet Monday in Athens
(Recasts, updates with settlement prices)
By Robert Gibbons
NEW YORK, April 16 (Reuters) - Oil prices fell 2.65 percent
on Friday as news that the U.S. government charged Goldman
Sachs <GS.N> with fraud over subprime-related financial
products pushed markets lower.
The Securities and Exchange Commission lawsuit alleges that
the investment bank, a trader with large positions across many
markets including commodities, committed fraud in the
structuring and marketing of collateralized debt obligations
tied to subprime mortgages. []
"The market is reacting to Goldman's extensive trading
positions across all asset classes and the threat that those
markets will all be disrupted as an unintended consequence of
this investigation," said Joseph Arsenio, managing director at
Arsenio Capital Management in Larkspur, California.
The dollar and yen advanced strongly on rising risk
aversion after the Goldman reports and with persistent concern
over Greece's fiscal problems weighing on the euro.[]
"We started off mainly worrying about Greece again, the
dollar got strong on reports they are going to the IMF this
weekend. Going into another weekend of Greece issues probably
pressured us early," said Phil Flynn, analyst at PFGBest
Research in Chicago.
U.S. stocks fell after six days of higher finishes, led by
bank shares and corporate earnings that did not meet
expectations.[]
U.S. crude for May delivery <CLc1> settled at $83.24 a
barrel, falling $2.27, or 2.65 percent, the largest one-day
percentage loss since Feb. 5. Intraday on Friday, prices fell
as low as $82.52.
The June Brent contract <LCOc1> fell $1.60 to settle at
$85.99 a barrel. The May London Brent crude oil contract
reached 18-month highs before it expired on Thursday, jumping
to a premium to the front-month U.S. crude contract of over
$1.60.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Graphic on Brent and U.S. crude's front-month contracts:
http://link.reuters.com/tuj28j
For a technical outlook on U.S. crude []
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
The 19-commodity Reuters-Jefferies CRB index <.CRB> fell
over 1 percent, backing away from Wednesday's 12-week highs.
Adding to the pressure on oil early Friday was news that
Thomson Reuters/University of Michigan's Surveys of Consumers
showed U.S. consumer sentiment took a negative turn in early
April due to a grim outlook on income and jobs.
[]
Also on Friday, the Senate Agriculture Committee's draft
bill to regulate the $450 trillion over-the-counter derivatives
market was unveiled, taking a tougher tack against big banks
than the Senate Banking Committee or House bills on the issue.
The bill would require banks to spin off swaps desks if
they are protected by federal deposit insurance or access the
Federal Reserve discount window. []
The bill requires most swaps to trade on regulated
exchanges and pass through clearinghouses. Commercial end users
could claim exemptions from the requirements.
Traders also eyed comments from China's President Hu, who
said the world's second largest oil consumer remains on course
to gradually put in place a managed floating exchange rate
system. []
(Reporting by Matthew Robinson, Gene Ramos, Edward McAllister
and Eileen Moustakis in New York; Joe Brock in London;
Alejandro Barbajosa; Editing by Lisa Shumaker)
