* Oil, euro pressured on worries about Europe's debt
* API reports surprise crude inventory slip
* Coming up: EIA inventory data, Wednesday 10:30 a.m. EDT
(Updates with API inventory data in paragraphs 14-17)
By Robert Gibbons
NEW YORK, May 18 (Reuters) - U.S. oil futures fell on
Tuesday, ending at a seven-month low as Europe's debt problems
revived risk aversion among investors and pulled the euro and
oil back from early gains.
U.S. crude for June delivery <CLc1> fell 67 cents, or 0.96
percent, to settle at $69.41 a barrel, the lowest settlement
since crude closed at $66.71 on Sept. 29, 2009.
London Brent crude <LCOc1> for July fell 67 cents to settle
at $74.43 a barrel, ending down a fourth consecutive day.
Crude jumped in early trading to $72.52, then fell to a
session low of $68.91 -- off 20.9 percent from their 19-month
high of $87.15 hit on May 3.
"The euro fell back toward its previous four-year low (vs
the dollar) and the financial equities were hit some. The
concerns about Europe's debt situation are still there," said
Chris Dillman, analyst at Tradition Energy in Stamford,
Connecticut.
The euro extended losses versus the U.S. dollar to hit a
four-year low below $1.22 in afternoon trading. [] The
dollar also strengthened against a basket of currencies <.DXY>,
rallying as investors sought safety in the dollar and the yen.
The euro came under heavy pressure after news the German
government plans to ban naked short-selling from midnight in
the country's 10 most important financial institutions.
[].
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U.S. equities also reversed on concerns over Europe, which
also dragged export-dependent technology shares. Bank stocks
were driven lower by fears over the implications of a federal
financial regulation proposal. []
A final vote on the Wall Street regulatory overhaul is
expected soon, after key senators reached a compromise on the
balance of power between state and federal officials. For
details see [].
U.S. heating oil futures ended lower, but gasoline futures
ended unchanged after a report from MasterCard Advisors
SpendingPulse said U.S. retail gasoline demand rose 0.8 percent
last week from the previous week. []
CUSHING STOCKPILES
Crude stockpiles have risen in the last eight weeks to a
record 37 million barrels, at the U.S. crude oil contract's
West Texas Intermediate benchmark delivery point in Cushing,
Oklahoma. This has pushed the front-month U.S. crude contract
down relative to later futures contracts <CL-1=R> and Brent.
On Monday open interest for the front-month June crude
contract stood at 138,574, near the record for a front-month
contract. The contract expires on Thursday.
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For a chart on front-month contract open interest, click:
http://graphics.thomsonreuters.com/10/OIL_NYMXI0510.gif
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Some trading sources said the contango, the higher prices
for contracts further out, could be an incentive for traders to
try to take delivery. But other sources noted that the lack of
storage available may increase volatility as too many traders
try to exit positions just ahead of expiration.
Ahead of weekly oil inventory reports, analysts surveyed by
Reuters forecast total U.S. crude oil stockpiles rose last week
as imports rebounded. [] Gasoline stockpiles were expected
to be down and distillate stocks higher.
Late on Tuesday, industry group the American Petroleum
Institute reported crude stocks fell 794,000 barrels, against
the forecast for stockpiles to be up 700,000 barrels. []
The API also reported a rise in gasoline stocks and a drop
in distillate inventories.
The U.S. Energy Information Administration's inventory
report is scheduled for release on Wednesday at 10:30 a.m. EDT
(1430 GMT).
OPEC EYES PRICE FALL
Angola's oil minister said earlier on Tuesday that the
Organization of the Petroleum Exporting Countries would need to
hold an extraordinary meeting if oil prices fell sharply again.
[]
Libya's top energy official, Shokri Ghanem, earlier on
Tuesday told Reuters that OPEC will watch the market before
deciding on any action. []
(Additional reporting by Gene Ramos in New York, Chris Baldwin
in London and Judy Hua in Singapore)
