* Oil drops nearly 4 pct, worst 3-day run since Feb 2009
* Recovered main losses from mid-afternoon stocks rout
* Greece contagion fears still weigh on financial markets
* Coming up: US nonfarm payroll, jobs data, Friday morning
(Releads, updates prices, market activity)
By Gene Ramos
NEW YORK, May 6 (Reuters) - U.S. oil prices fell 4 percent
in volatile trading on Thursday, notching their worst three-day
run in 15 months on growing fears that the Greek debt crisis
could engulf other economies.
Oil recouped some of the more than $5 a barrel losses it
suffered after a sudden mid-afternoon rout said to have been
caused by an errant stock market trade, but crude still ended
the day at its lowest since mid-February in near-record volume
as the dollar rose and other risk assets retreated.
As traders regained their poise following a half-hour of
unprecedented volatility across financial markets, including a
near 10 percent dive in major U.S. stock market indices, the
focus returned to the anxious situation in Europe.
"We had this huge appetite going for risk assets ever since
March of 2009, and it has been fading, starting slowly a few
days ago and then really taking off this afternoon," said Peter
Beutel, Cameron Hanover, New Canaan, Connecticut.
After plunging to an intraday low of $74.58 a barrel when
stock markets collapsed and the dollar rallied around
mid-afternoon, June crude <CLc1> was trading down $2.87 at
$77.11 by 4:27 p.m. (2027 GMT).
June crude's volume on the day hit 574,000 contracts by 4
p.m. EDT, the second highest on record for front-month crude on
after the 596,000 peak hit on Feb. 5. Total market activity
neared 1.1 million lots, the highest since mid-April but off
the record over 1.4 million.
London Brent crude <LCOc1> fell $3.08 to $79.53.
Market sources said an errant trade by a person at a Wall
Street bank may have triggered the cross-market sell-off, and
the Nasdaq OMX Group said it was investigating potentially
erroneous transactions involving multiple securities.
[]
Oil has fallen more than 10 percent this week, its worst
week since the start of 2009, punished both by anxiety over the
euro zone as well as data showing rising U.S. crude inventories
as a demand rebound fails to materialize.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
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
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
Even after Greek lawmakers approved an austerity bill that
would open the door to a record bailout, doubts persisted 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. []
And the euro tumbled to a 14-month low versus the dollar
after the European Central Bank's decision to leave monetary
policy unchanged failed to convince investors that it will be
able to prevent a debt crisis in the euro zone. []
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.
Fundamentals also continued to move against the market,
with industry data provider Genscape reporting that oil
inventories at the NYMEX' Cushing, Oklahoma, delivery hub
rising by another 990,795 barrels to a record 37.8 million
barrels in the week to May 4. []
On Friday, dealers are awaiting pivotal U.S. jobs data
expected to show that nonfarm payrolls rose for a second month,
providing a bit more evidence of an economic recovery that
should help revive oil consumption.
(Additional reporting by Robert Gibbons and Joshua Schneyer in
New York, Joe Brock in London, and Florence Tan in Singapore;
editing by Marguerita Choy)
