(Corrects reference to previous close in fourth paragraph to
Tuesday, instead of Wednesday)
* Euro rebounds from four-year low versus dollar
* June contango narrows ahead of Thursday expiry
* EIA: US crude stocks rise, but less than expected
* Cushing oil inventories hit another record
* Coming up: U.S. jobless claims due Thursday morning
(Recasts, updates market activity, prices, details)
By Gene Ramos
NEW YORK, May 19 (Reuters) - U.S. prompt crude oil futures
surged at the close on Wednesday and snapped a six-day losing
streak as traders covered short positions ahead of expiry, but
other contracts fell as euro zone worries spurred risk
aversion.
U.S. June crude <CLc1>, which expires on Thursday, settled
up 46 cents at $69.87 a barrel in volatile trade that saw
prices drop as low as $67.90, the lowest intraday price since
Sept. 30, 2009 and down more than 22 percent from the 19-month
high hit on May 3.
"As we're getting close to expiration, some of the shorts
in the market that have sizable positions ... are doing some
pre-expiration day covering and that's why you saw the front
contract run," said Gene McGillian, analyst at Tradition Energy
in Stamford, Connecticut.
U.S. oil prices surged further after settlement, to a
session high $71.22. At settlement, June crude's discount
against the July contract <CLNO>, which is not trading more
heavily than June, narrowed to $2.61 from $3.29 at the close on
Tuesday <CL-1=R>.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Graphic on WTI open interest pre-expiry:
http://link.reuters.com/sug34k
Oil 24-hour technical outlook chart:
http://link.reuters.com/ret25k
Chart on oil/dollar correlation returns with Europe risk:
http://link.reuters.com/set25k
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
"The majority of the rolls from the expiring June contract
to the next month appear to be nearly completed and the spreads
have tightened," said Rich Ilczyszyn, senior market strategist
at Lind-Waldock in Chicago.
Brent crude <LCOc1>, with its front-month July contract,
ended down 74 cents at $74.43, weighed down by Germany's moves
to curb speculation which roiled financial and commodity
markets and prompted a move to safer investments.
Germany banned naked shorts, or bearish wagers, on some
financial instruments amid worries that the euro zone's
sovereign debt troubles would stunt economic growth. []
The Reuters-Jefferies CRB index <.CRB>, a global
commodities benchmark, closed down 0.9 percent.
The euro rallied from a four-year low against the dollar as
traders bought the unit amid speculation that European monetary
officials may act to support the currency. [] The dollar was
down 0.98 percent against a basket of currencies. <.DXY>
Weekly inventory data from the U.S. Energy Information
Administration showed crude stocks rose 200,000 barrels last
week, against a forecast in a Reuters poll for a 700,000 barrel
rise. Inventories at the key Cushing, Oklahoma delivery point
for the New York Mercantile Exchange hit another high, however.
[]
Distillate stocks posted a surprise decline and gasoline
inventories dropped, but by a lower than forecast volume.
Oil is below the $70 to $80 level many members of the
Organization of the Petroleum Exporting Countries have said
they prefer, but OPEC officials have stopped short of calling
for any immediate steps to prop up the market.
"Prices are not related to supply and demand. They are
related to the world economy. There is no role for OPEC at this
stage," said Algeria's oil minister, Chakib Khelil, adding
prices were likely to rebound once the Eurozone rescue package
started to take effect. []
(Additional reporting by Robert Gibbons and Rebekah Kebede in
New York, Alex Lawler in London and Florence Tan in Singapore;
editing by Jim Marshall)
