* Rising U.S. crude, fuel stocks weigh
* Concern Greek crisis could spread to Portugal, Spain
* Weak euro hammers oil, commodity prices
* Coming Up: U.S. EIA weekly oil stocks data
(Updates headline, recasts, adds quote)
By David Sheppard
LONDON, May 5 (Reuters) - Oil fell $3 on Wednesday to below
$80 a barrel for the first time since March, taking the week's
losses to 7.5 percent as the Greek debt crisis shook markets and
rising U.S. crude stocks indicated soft demand.
Prices fell to a low of $79.15, exactly $8, or 9 percent,
below Monday's 19-month high of $87.15.
Rising concerns that Greece's debt crisis could spill into
other euro zone members and derail the global recovery have seen
oil futures shed almost 40 percent of gains since February.
"The volatility is extreme, I haven't seen anything like
this in a long time," one London-based trader said. "It's all
about the slump in the euro today. All commodities are getting
absolutely hammered."
U.S. crude for June delivery <CLc1> was down $2.90 at $79.84 a
barrel by 1245 GMT. Prices are still around double the level
they were at the start of 2009.
London Brent crude <LCOc1> was down $2.66 at $82.99 a
barrel.
On Wednesday, Finland's finance minister said there is a
risk Greece's financial problems could spread to Spain or
Portugal, while a senior member of Germany's ruling party said
concerns remain that an international aid package for Greece
could fail. [] []
The euro fell to its lowest level against the dollar since
April 2009 on Wednesday, touching $1.2802. The single currency
is down around 5 cents against the dollar since Friday.[]
Dollar-priced commodities like oil are undermined by
strength in the greenback as they become more expensive for
holders of other currencies. Rising risk aversion is also a
factor as investors pull money out of volatile assets like oil.
Industrial metals like copper, zinc and aluminium were all
down by between 4 and 5 percent on the day.
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For a graphic on dollar/oil correlation, click
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For a technical chart, click:
http://graphics.thomsonreuters.com/gfx/WT_20100505084256.jpg
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"So much good news is already priced into this market that
when sentiment turns gloomy, as it has done with Greece and
Spain, we're bound to see jitters from time to time," said Helen
Henton, head of commodity research at Standard Chartered.
"We are also expecting to see a big increase in U.S. crude
oil inventories later today."
DEMAND WEAKNESS
Crude oil inventories in the world's largest energy consumer
rose by 3 million barrels in the week to April 30, the American
Petroleum Institute said on Tuesday. Analysts polled by Reuters
had predicted a 1.1 million barrel rise.
Gasoline stocks also rose, climbing by 1.5 million barrels
against analyst expectations for a 200,000 barrel build.
Figures from the U.S. government's Energy Information
Administration are due at 1430 GMT on Wednesday.
U.S. demand for gasoline at the pumps, which accounts for
more than 10 percent of total world oil demand, was down 2.3
percent on last year in the week to April 30, the Mastercard
SpendingPulse report showed on Tuesday.
Oil spill workers raced against time in the Gulf of Mexico,
hoping to seize on at least one more day of calm weather in
their fight to contain a huge and growing slick before winds
turn against them. []
One of the three leaks from the ruptured Gulf of Mexico
undersea well owned by BP <BP.L> has been capped, but oil is
still flowing out at a rate of 5,000 barrels (210,000 gallons)
per day, the National Oceanic and Atmospheric Administration
(NOAA) said on Wednesday.
Crude oil prices have not been seriously affected by the oil
spill after a deadly April 20 rig explosion triggered a breach
in BP's <BP.L> well.
(Additional reporting by Judy Hua in Singapore; editing by Sue
Thomas)
