* Dollar rises as euro falls to 14-month low
* Greece contagion fears still weigh on financial markets
* European Central Bank leaves interest rates unchanged
(Releads, updates with market activity and prices, changes
byline and dateline, previous LONDON)
By Gene Ramos
NEW YORK, May 6 (Reuters) - U.S. crude oil futures were
down more than 1 percent on Thursday, after hitting a nine-week
low earlier as oil investors continued to seek safer havens,
such as the dollar, on fears that the Greek debt crisis could
engulf other euro zone economies.
U.S. crude for June delivery <CLc1> was down 80 cents, or 1
percent, at $79.17 a barrel by 12:05 p.m. EDT (1605 GMT), after
sliding to $78.24. the lowest intraday price since March 1.
The contract dived more than 3 percent on Wednesday to
below $80 for the first time in six weeks after U.S. government
data showed crude stocks rose more than expected last week.
Doubts over Greece's ability to carry out tough spending
cuts in return for a 110 billion euro aid package from the
European Union and the International Monetary Fund continued to
dampen risk appetite.
The European Central Bank left monetary policy unchanged on
Thursday, failing to convince investors that it will be able to
prevent a debt crisis in the euro zone. []
The euro tumbled to a 14-month low against the dollar after
the ECB's failure to offer any additional measures to ease
Greece's predicaments. [] Risk averse investors are pulling
out of equities and commodities and instead putting their mony
into the dollar.
Bearish sentiment continued to rule for a third day in a
row, heightened by weaker-than-expected U.S. retail sales data
for April, which also felled equities on Wall Street. []
The crisis of confidence in euro-zone economies and the
latest U.S. economic data stoked further worries that global
energy demand could be hard hit, just as signs of recovery are
emerging, particularly in the United States, the world's
largest energy consumer.
"The crumbling euro is making a very blatant statement
about the concern investors have about the (European) Union's
economic prospects ... more immediately, how is energy demand
going to expend," said Mike Fitzpatrick, vice president for
energy at MF Global in New York.
The NYMEX front-month spread <CL-1=R> narrowed further, to
below around $2.70 after hitting $3.10 on Wednesday. The spread
or the discount for prompt contract to the following month hit
its widest level on Tuesday since February 2009.
The discount, or contango, has widened in recent weeks as
crude oil stored at the Cushing, Oklahoma, delivery hub for the
NYMEX contract, has grown to a record 36.2 million barrels in
the week to April 30, U.S. government data showed.
Stocks continued to climb this week. Industry data provider
Genscape reported that oil inventories at the hub rose 990,795
barrels to a record 37.8 million barerls in the week to May 4.
[]
London Brent crude <LCOc1> fell $1.19, or 1.4 percent, to
$81.42 a barrel.
Brent's premium over the NYMEX crude benchmark <CL-LCO1=R>,
also known as West Texas Intermediate, narrowed to $2,25, after
hitting $3.12. The premium hit $3.65 on April 28, the widest
since August 2009.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
For a chart on the 2010 performance of commodities, see:
http://graphics.thomsonreuters.com/10/CMD_PRFG0510.html
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
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
In the U.S., BP <BP.L> engineers prepared to start lowering
a 98-ton metal chamber over the ruptured undersea oil well in
the Gulf of Mexico, trying to control a spill tha threatens an
environmental disaster for the U.S. shoreline. []
In Nigeria, Africa's largest oil exporter, Acting President
Goodluck Jonathan was sworn in as head of state, following the
death of President Umaru Yar'Adua. []
His death on Wednesday was unlikely to have an impact on
oil production in Nigeria, which has suffered major outages due
to attacks on oil facilities in the last five years.
(Additional reporting by Robert Gibbons in New York, Joe Brock
in London, and Florence Tan in Singapore; editing by Marguerita
Choy)
