* Jet fuel use cut by flight disruptions in Europe
* U.S. dollar rises as investors seek safe-havens
* British, German regulators eye Goldman after U.S. charge
(Recasts, updates prices, market activity)
By Daniel Wallis
NEW YORK, April 19 (Reuters) - Oil fell more than 2 percent
on Monday, briefly touching a three-week low below $81 a barrel
as flying restrictions in Europe ate into jet fuel demand and
fraud charges against Goldman Sachs Group Inc <GS.N> dampened
risk appetite around the world.
The drop followed a 2.7 percent fall in the previous
session, which was the largest percentage loss since Feb. 5.
Rattled by Friday's legal move against Goldman and lingering
concerns about Greek debt, investors sought safety in the
low-yielding but stable U.S. dollar and yen. []
"The combination of the Goldman Sachs fraud charges and the
impact of the Iceland volcanic eruption on Europe's economy as
it relates to oil demand have pulled crude prices down," said
PFGBest Research analyst Phil Flynn in Chicago.
"The outlook has dramatically changed, particularly with
the Goldman issue, and may be a major sentiment-changing event
for the energy market."
U.S. crude for May delivery <CLc1> fell $1.92 to $81.30 by
2:00 p.m. EDT (1800 GMT). Earlier, U.S. oil touched $80.53, the
lowest intraday price since March 29. Crude briefly broke below
the 50-day moving average []. Brent crude <LCOc1> for June
fell $1.92 to $84.07.
Analysts said European flight disruptions caused by
Iceland's volcano were also adding pressure to oil as the ash
cloud slashed world jet fuel demand by at least 1 million
barrels per day (bpd), or about a fifth of global consumption.
[]
The eruption has hammered air travel in Europe since
Thursday, with around 70 percent of all flights grounded.
[] Heating oil, the benchmark futures contract
that jet fuel trades against, was the biggest percentage loser
in the oil futures complex after midday.
Wall Street edged down, weighed by the Goldman Sachs saga
that overshadowed positive earnings by Citigroup <C.N> and
upbeat economic data. []
The U.S. Securities and Exchange Commission (SEC) has
accused Goldman of duping clients over its marketing of a
subprime mortgage product, and the bank could also be pursued
by regulators in Germany and Britain. []
Goldman, Wall Street's most powerful bank and the world's
biggest commodity trader, denies the charges. []
But its shares fell again and the cost of insuring its debt
rose as investors struggled to assess how big a hit Goldman and
the rest of the financial industry would take.
Further pressuring oil, a survey on Friday showed U.S.
consumer sentiment took a surprise negative turn in early
April. []
Oil prices have nearly tripled from lows near $30 a barrel
at the end of last year to more than $87 earlier this month as
robust economic data buoyed hopes of increasing demand.
A retreat from those levels would relieve the Organization
of the Petroleum Exporting Countries (OPEC) of pressure to cool
rising prices amid concerns that high energy costs could hurt a
fragile economic recovery. []
OPEC member nations have shown no inclination to increase
output quotas to try to restrain prices.
Venezuela's oil minister said last week he saw no need to
boost output unless there was a robust strengthening of demand,
and Kuwait's oil minister said OPEC would only consider raising
output if oil went above $100 a barrel.
(Reporting by Gene Ramos in New York, Alex Lawyer in London
and Fayen Wong in Perth; Writing by Daniel Wallis; Editing by
David Gregorio)
