(Corrects paragraph 3 to ...since March 22 when it hit
$78.57 ..., not March 1.)
* Dollar up as euro falls to 14-month low
* Stock markets also hit on fears of Greek contagion
* Coming up: U.S. jobless claims; 1230 GMT
* For a technical view, click: []
(Recasts, adds stock markets, updates oil prices)
By Florence Tan
SINGAPORE, May 6 (Reuters) - Oil fell more than $1 to a
six-week low under $79 a barrel on Thursday, as the euro
slumped while global stock markets tumbled on fears that
Greece's economic crisis may spread to other European nations.
The euro fell to a 14-month low as scepticism that Greece
can deliver on its promises of strict austerity measures
dominated the markets. Spooked investors turned to safe havens
such as gold and the dollar, pushing their values higher.
[] []
U.S. crude for June delivery <CLc1> slid as much as $1.10,
or around 1.3 percent, to $78.87 a barrel by 0702 GMT, the
lowest intraday price since March 22 when it hit $78.57.
The contract dived more than 3.0 percent on Wednesday to
below $80 a barrel for the first time in six weeks after U.S.
government data showed crude stocks at the key storage hub in
Cushing, Oklahoma, rose 1.6 million barrels to a record of 36.2
million barrels.
London Brent crude <LCOc1> fell 85 cents to $81.76 a
barrel.
"There is still room for the euro to further decline
against the dollar. Oil could possibly go down further," said
Ken Hasegawa, commodities sales manager at brokerage Newedge
Japan.
"We have to be careful how the euro will perform in the
next few weeks."
Oil becomes more expensive for holders of other currencies
when the dollar strengthens.
U.S. crude has seen strong support at $79, but prices may
be capped at $82 on Thursday, Hasegawa added.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
For a technical chart, see:
http://graphics.thomsonreuters.com/gfx/WT_20100605084529.jpg
For a graphic on the oil to dollar correlation, click:
http://graphics.thomsonreuters.com/gfx/RSW_20100605144040.jpg
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
The euro lost 1.25 percent to $1.2818 <EUR=>, its lowest
rate since mid-March 2009, after losing about 3.5 percent
against the U.S. currency this week.
Gold priced in euro <XAUEUR=R> struck another record at
918.74 euros on Thursday while the dollar rose 0.09 percent
against a basket of currencies. []
Stock markets across Asia also tanked, with Japan's Nikkei
average <> down 3.3 percent and Shanghai <> down more
than 4 percent on tightening worries.
Investors are doubtful that Greece will be able to carry
out the tough measures it promised in return for a 110 billion
euro aid package from the European Union and the International
Monetary Fund. []
NIGERIA, U.S. DEMAND MAY SUPPORT
News of the death of Nigerian President Umaru Yar 'Adua may
create more uncertainty about the country's oil production.
[]
Analysts are also watching the U.S. jobless claims data due
later on Thursday for further confirmation that the economic
recovery is on track to boost oil demand.
Signs of a recovery in the labour market grew as reports on
Wednesday showed job growth among private firms and plans for
layoffs falling to their lowest in four years. []
Latest U.S. weekly oil data showed gasoline demand hit a
record high for any April, while diesel consumption has started
to recover, analysts at Barclays Capital said in a note.
Still, Energy Information Administration data showed
gasoline stocks rose 1.2 million barrels to 224.9 million
barrels, well above analysts' forecasts.
"It does finally look as if diesel demand is beginning to
join the path that the macroeconomic data implied it had to
sooner or later," the bank said.
(Editing by Ramthan Hussain)
(florence.tan@thomsonreuters.com; + 65 6870 3497; Reuters
messaging: florence.tan.thomsonreuters.com@reuters.net))
