* Rising U.S. crude, fuel stocks weigh
* Concern Greek crisis could spread to Portugal, Spain
* Weak euro hammers oil, commodity prices
(Updates with weekly U.S. EIA fuel stock data)
By David Sheppard
LONDON, May 5 (Reuters) - Oil fell to a month-low below $80
a barrel on Wednesday, taking the week's losses to 7.5 percent
as the Greek debt crisis rattled markets and rising U.S. crude
stocks pointed to tepid demand.
Prices fell to a low of $79.15, exactly $8, or 9 percent,
below Monday's 19-month high of $87.15, before paring losses.
Rising concerns that Greece's debt crisis could spill into
other euro zone countries 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 $2.10 at $80.64
a barrel by 1458 GMT. Prices are still around double the level
they were at the start of 2009.
London Brent crude <LCOc1> was down $2.28 at $83.39 a
barrel.
Rising crude and product stocks in the United States, the
world's largest energy consumer, pressured prices further, with
government data on Wednesday broadly confirming an industry
report from the previous day.
Crude oil stocks rose by 2.8 million barrels last week, the
U.S. Energy Information Administration (EIA) said. Analysts
polled by Reuters had predicted a 1.1 million barrel gain.
Gasoline stocks were up by 1.2 million barrels, while
disitillate stocks, which include diesel, jet fuel and heating
oil, rose by 600,000 barrels. [] []
Crude oil stocks at the Cushing, Oklahoma, delivery hub for
NYMEX-traded oil hit a record high, climbing by 1.6 million
barrels to 36.2 million barrels.
FORK IN THE ROAD
But the major focus for oil markets remained the situation
in Europe, traders and analysts said.
German Chancellor Angela Merkel warned of widening debt
problems if a 110 billion euro ($146.5 billion) Greece rescue
does not work.
"We're at a fork in the road," she told German lawmakers.
"This is about nothing less than the future of Europe."
[]
The euro fell to its lowest level against the dollar since
April 2009, touching $1.2802 on fears debt problems could flare
up in Portugal and Spain. The single currency is down around 5
cents against the dollar since Friday. []
Dollar-priced commodities such as 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 at one point on Wednesday.
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For a graphic on dollar/oil correlation, click
http://graphics.thomsonreuters.com/gfx/RSW_20100405150342.jpg
For a technical chart, click:
http://graphics.thomsonreuters.com/gfx/WT_20100505084256.jpg
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"The dollar remains the critical underpinning factor for
energy price moves," Caprock Risk Management analyst Chris
Jarvis said.
"With the Greece headlines still making waves and a flight
to quality taking place -- which is driving the dollar higher --
energy prices remain under pressure."
Oil spill workers raced against time in the Gulf of Mexico,
hoping to take advantage of another day of calm seas in their
fight to contain a huge spreading oil slick before it hits the
U.S. shoreline. []
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 the New York Energy Desk and Judy Hua in
Singapore; editing by Keiron Henderson)
