* Rising U.S. crude, fuel stockpiles weigh
* Euro pares losses, but euro-zone worry persists
* Dollar's rise sparks further commodities selling
(Updates market activity, prices, changes by-line and
dateline, previous LONDON)
By Gene Ramos
NEW YORK, May 5 (Reuters) - Oil slumped more than 3 percent
on Wednesday, extending losses for the second straight day, as
the dollar rose on safe-haven investment flows on worries the
Greek debt crisis could spread to other euro-zone countries.
Adding pressure, U.S. government data showed domestic crude
and gasoline stocks increased last week, much more than
forecasts.
On the New York Mercantile Exchange, crude for June
delivery <CLc1> was down $2.90, or 3.5 percent, at $79.84 a
barrel by 2 p.m. EDT (1800 GMT). It earlier fell to a low of
$79.15, exactly $8, or 9 percent, below Monday's 19-month high
of $87.15.
"Crude futures are off their lows, but still pressured as
the dollar is still up a lot...and that's what's moving crude
futures today," said Tom Knight, trader at Truman Arnold, in
Texarkana, Texas.
In London, June Brent crude <LCOc1> traded on the
Intercontinental Exchange was down $3, or 3.5 percent, at
$82.67 a barrel.
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For graphics on dollar/oil correlation, click
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http://graphics.thomsonreuters.com/gfx/JLeff_20100505131145.jpg
For a technical chart, click:
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Rising concerns that Greece's debt crisis could spill into
other euro zone countries and derail the global recovery have
seen investors become risk averse, buying the dollar and
selling oil and equities. The euro fell below the key $1.29
level for the first time in more than a year. [] []
A stronger dollar reduces demand for greenback-denominated
commodities, and oil futures shed more than 40 percent of the
gains made from the start of February to Monday's peak.
"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 oil stocks rose by 2.8 million barrels last
week, the U.S. Energy Information Administration (EIA) said,
broadly confirming an industry report the previous day. A
Reuters poll had predicted a 1.1 million barrel gain. []
Gasoline stocks were up by 1.2 million barrels, dwarfing
the forecast for just a 200,000 barrel increase. Distillate
stocks, which include diesel, jet fuel and heating oil, rose by
600,000 barrels, well below the forecast for a 1.7 million
barrel build.
Crude oil stored 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.
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 well.
(Additional reporting by Robert Gibbons in New York, David
Sheppard in London, and Judy Hua in Singapore; editing by
Marguerita Choy)
