* Steepest drop in 3 months as retreats from 19-mth highs
* API data shows crude rose more than expected last week
* Strong dollar helps pressure oil
* Coming up: U.S. EIA inventory data Wednesday 1430 GMT
(Recasts, updates prices and API inventory report results)
NEW YORK, May 4 (Reuters) - U.S. crude oil fell nearly 5
percent in late trading on Tuesday as rising oil inventories
and the stronger dollar pushed oil to its steepest loss in
three months.
The dollar's rise came as investors turned risk averse and
sold oil and equities amid concerns that Greece's debt problems
could spread to other euro zone countries. A stronger dollar is
usually bearish for oil as it reduces demand for commodities
traded in dollars.
"The oil markets were hammered on Tuesday as investors
liquidated equities and commodities aggressively," said Peter
Beutel, analyst at Cameron Hanover.
An industry report showing a larger-than-expected jump in
inventories sent prices even lower in post-settlement trading.
U.S. crude for June <CLc1> settled at $82.74 a barrel,
dropping $3.45, or 4 percent, after hitting an intraday high of
$87.15 on Monday, the strongest front-month price since $89.82
traded on Oct. 9, 2008.
In post-settlement trading on Tuesday, U.S. crude ended
electronic trading at $82.07, down $4.15 or 4.78 percent,
having dropped to $82.05.
Tuesday's drop was the largest one-day percentage loss
since the 4.99 percent slide on Feb. 4, which had also been in
concert with a risk aversion tumble in equities, a slump in the
euro and a surprise rise in crude inventories.
Brent crude <LCOc1> slid $3.27 to settle at $85.67, but
held on to its big premium over U.S. West Texas Intermediate
crude futures, or also known as WTI.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
For crude price technical view, see: []
For a technical chart on crude prices, click:
http://graphics.thomsonreuters.com/gfx/WT_20100405084512.jpg
For a graphic on dollar/oil correlation, click
http://graphics.thomsonreuters.com/gfx/RSW_20100405150342.jpg
For a chart showing Brent premium over U.S. crude, click
http://link.reuters.com/qap52k
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The industry group American Petroleum Institute's report
late on Tuesday showed crude supplies rose 3 million barrels in
the week to April 30, with gasoline and distillate stockpiles
also rising more than expected. []
Ahead of the weekly oil inventory reports, expectations
were that they would show U.S. crude inventories rose 1.1
million barrels as a discount for prompt oil widened the
contango structure of the futures curve, a Reuters survey
showed. []
The U.S. Energy Information Administration's report is set
to arrive on Wednesday morning.
The contango, where front-month contracts are weaker than
future months, had strengthened on Tuesday to put front-month
June crude around $3 less than the July contract <CL-1=R>.
The back end of the curve also has strengthened, with U.S.
futures for five years ahead <CLc61> widening their premium
over the front-month to $12.69 from under $5 a month ago.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
For a graphic showing how U.S. crude futures for five years
forward <CLc61> have risen relative to the front-month, click
http://link.reuters.com/fet52k
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The euro tumbled to a one-year low beneath $1.30, hit by
fear that emergency aid for Greece may not prevent debt crises
in other euro zone countries. []
U.S. stocks fell on concerns about Greece's debt problems
and despite data showing new orders received by factories rose
unexpectedly and pending home sales rose to a five-month high
in March. []
U.S. gasoline and heating oil futures also fell sharply on
Tuesday, with June gasoline futures <RBM0> settling more than
11 cents lower at $2.32 a gallon.
BP <BP.L> continued efforts to stop oil gushing into the
Gulf of Mexico from a ruptured offshore well, but easing fears
of disruptions to the key refining hub on the Gulf Coast
weighed on the markets. []
"Oil has taken a dive ... on the back of downgraded
expectations that the Gulf of Mexico oil slick will materially
disrupt refining oil production operations in the region,"
according to J.P. Morgan's Lawrence Eagles.
The U.S. Coast Guard said the oil slick had not yet
disrupted shipping and operations at the key Louisiana Offshore
Oil Port were normal. [] []
(Reporting by Robert Gibbons and Gene Ramos in New York,
Christopher Johnson in London and Judy Hua in Singapore;
Editing by Marguerita Choy)
