* Greek debt fallout concern rises after S&P downgrade
* U.S. oil inventories forecast to rise for 2nd week
* US consumer confidence rose to post-crisis high in April
* Brent premium widens, U.S. crude contango steepens
* Coming up: API oil data at 2030 GMT, EIA at 1430 GMT Wed
(Updates prices, adds details)
By Joshua Schneyer
NEW YORK, April 27 (Reuters) - Oil fell 1.9 percent on
Tuesday toward $82 a barrel after investors pulled cash out of
energy markets in a flight from risk, due to concern about the
Greek debt crisis and rising U.S. crude inventories.
Standard & Poor's cut Greece's credit rating to junk status
minutes after downgrading Portugal. Concerns surrounding
debt-laden European economies have led to a bearish outlook for
fuel demand in a key consumption region. The euro extended
losses versus the dollar following the downgrades. <.DXY>
U.S. crude for June delivery <CLc1> fell $1.60 to $82.60 a
barrel by 1:50 p.m. EDT (1750 GMT), while ICE June Brent crude
<LCOc1> traded down $1.05 at $85.78.
Brent, Europe's benchmark crude, traded at its biggest
premium to U.S. crude on the New York Mercantile Exchange since
August, 2009, with an advantage of up to $3.51 a barrel.
Brent's premium <CL-LCO1=R> was exacerbated by weakness in
the June NYMEX crude contract, which traded at a $2.51 a barrel
discount, or in contango, to July barrels after reaching the
widest discount since December earlier Tuesday.
The widening contango on the NYMEX is being driven by a
perceived crude glut at landlocked Cushing, Oklahoma, where the
barrels are delivered and stocks have risen steadily since
mid-March.
A firming dollar has also helped to weaken crude, priced in
dollars, by making it more costly for holders of foreign
currencies.
"The Greek crisis, which is really a currency crisis, is
likely to get even worse over time," said Joseph Arsenio of
Arsenio Capital Management in Larkspur, California.
"As the euro comes under pressure, demand could be
affected."
U.S. oil futures fell steeply as most analysts in a Reuters
poll expected data on Tuesday and Wednesday would show that
U.S. crude stocks rose for a second week last week, by 400,000
barrels a day, as refinery demand slumped. []
Inventories in the U.S. Midwest region are already at their
highest levels in at least two decades, according to U.S.
Energy Information Administration data.
"Cushing is getting full and my sense is this has started
having greater significance for (NYMEX) WTI prices, weakening
them relative to other crude," said Arsenio.
"The situation could last, because more and more crude is
flowing into the region."
The American Petroleum Institute industry group reports
weekly U.S. stocks data later Tuesday, while data from the U.S.
Energy Information Administration is due on Wednesday.
A rise in U.S. consumer confidence to an 18-month high in
April, according to a private industry group report, failed to
offset concerns over rising U.S. crude inventories and Greek
debt. []
The S&P stock index fell by 1.4 percent, while the dollar
firmed 0.7 percent against a basket of foreign currencies. []
<.DXY>
(Additional reporting by Ikuko Kurahone and Barbara Lewis in
London and Alejandro Barbajosa in Singapore; Editing by
Marguerita Choy)
