* U.S. crude sinks to lowest price since July 2009
* Crude at Cushing hub rises to a record-Genscape
* Weekly U.S. jobless claims rise unexpectedly
* Coming up: U.S. consumer sentiment data Friday
(Recasts, updates prices, market activity, new byline, changes
dateline, previously LONDON)
By Gene Ramos
NEW YORK, May 20 (Reuters) - U.S. oil prices fell sharply
on Thursday on worries that fiscal problems in Europe could
stifle global economic growth and energy demand.
The expiring June contract on the New York Mercantile
Exchange <CLMO> tumbled more than 8 percent to a nine-month low
as remaining open interests were either rolled to the next
month or sold, in an effort to avoid physical delivery.
The contract has fallen 26 percent since hitting a 19-month
high of $87.15 on May 3.
"Oil prices are sliding on liquidations ahead of the June
contract's expiration and as we have a glut of oil in the
Cushing, Oklahoma, delivery point," said Phil Flynn, analyst at
PFGBest Research in Chicago.
U.S. crude <CLc1> for June delivery fell $2.07 to $67.80 a
barrel by 2:05 p.m. EDT (1805 GMT) in volatile trade ahead of
expiry on Thursday. It slumped earlier to $64.24, the lowest
since July 30.
Investor caution hit the rest of the oil complex, with the
July contract <CLNO> down $2.52 at $69.96 a barrel, narrowing
its spread against the expiring June to $2.16, from $2.61 at
the close on Wednesday. ICE July Brent futures <LCOc1> were
down $2.80 at $70.89.
The U.S. Energy Information Administration on Wednesday
reported that stocks at the Cushing delivery point rose 900,000
barrels to a record 37.9 million barrels in the week to May 14.
[]
On Wall Street, all major equities indexes slid more than 3
percent on growing fears that the euro zone's handling of its
sovereign debt crisis could jeopardize global economic growth.
The Standard & Poor's 500 Index <.SPX> has fallen more than 10
percent from its April high, signifying a correction. []
A slew of U.S. data on Thursday fueled further concerns
about recovery in the world's top oil consumer and fueled more
risk aversion.
Weekly initial U.S. jobless claims rose unexpectedly and an
April index of U.S. leading economic indicators marked its
first decline in over a year. Rising manufacturing activity in
the nation's Mid-Atlantic region failed to stanch the oil
market's bearish outlook. []
"The fiscal crisis in Europe has been an eye-opener for
markets. Even though we have a recovery, it's clear that it
will be slow and painful and it's the same for oil demand,"
said Christophe Barret, oil analyst at Credit Agricole CIB.
The euro fell against major currencies, remaining
vulnerable on concerns other European countries may announce
regulations similar to Germany's bank on naked short-selling of
some stocks and bonds. [] []
Further pressure on crude came after industry data provider
Genscape said that crude stored at the hub risen 500,000 barels
in the week to May 18 to a record 39.96 million barrels.
[]
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For a chart on the returning oil/dollar correlation with
Europe risk, click:
http://graphics.thomsonreuters.com/gfx/RSW_20101905125817.jpg
For a chart showing the performance of commodities
including oil so far this year, click:
http://graphics.thomsonreuters.com/gfx/CMD_CRB200510.gif
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COMMODITIES TUMBLE
Oil's decline was part of a slump in an array of
commodities on Thursday. The 19-commodity Reuters-Jefferies CRB
index <.CRB>, a global commodities benchmark, fell 1.3 percent,
having tumbled earlier to its lowest level since September.
Oil prices this week have fallen below the $70-$80 a barrel
range that many members of the Organization of the Petroleum
Exporting Countries have said is fair for both producers and
consumers. But OPEC officials have stopped short of calling for
any immediate steps to prop up the market. []
The producer group's seaborne exports, excluding Angola and
Ecuador, were forecast rising 280,000 barrels per day in the
four weeks to June 5, according to a weekly estimate by UK
consultancy Oil Movements released on Thursday. []
(Additional reporting by Matthew Robinson and Robert Gibbons
in New York; Emma Farge in London; Judy Hua in Singapore;
Editing by David Gregorio)
