* Euro falls to 18-month low vs dollar, pressures oil
* U.S. crude stockpiles at Cushing at record high
* Coming up: U.S. crude oil June options expiration Monday
(Recasts, updates with settlement prices, changes byline)
By Robert Gibbons and Gene Ramos
NEW YORK, May 14 (Reuters) - U.S. crude oil futures fell more
than 3 percent to a three-month low on Friday, dropping for a
fourth straight session as concerns the European debt crisis will
curb energy demand growth weighed on prices already under pressure
from swollen U.S. oil inventories.
The euro plunged to an 18-month low against the dollar as
investors worried that spending cuts mandated by an emergency
bailout may choke off recovery in the 16-country euro zone.
[]
U.S. stocks fell on Friday on a combination of weak earnings
from retailers, Senate backing for limits on credit card fees and
concerns about Europe's debt problems, though the major indexes
finished up on the week. []
"Crude futures are down as people are realizing that the euro
zone debt troubles may not only be regional in scope but global as
well and that could harm world economic growth," said Rich
Ilczyszyn, senior market strategist at Lind-Waldock in Chicago.
U.S. crude for June delivery <CLc1> fell $2.79, or 3.75
percent, to settle at $71.61 a barrel, the lowest close since
ending at $71.19 on Feb. 5. Friday's intraday low of $70.83 was
the lowest price for a front-month contract since prices fell to
$70.77 on Feb. 8.
For the week, June crude fell $3.50, or 4.7 percent. The
two-week tumble of $14.54, or 16.9 percent, was the biggest
two-week percentage loss since the period ending Jan. 16, 2009,
during which front-month crude prices fell 21 percent.
Volatility is expected to remain a feature ahead of Monday's
June crude options expiration and the May 20 June crude contract
expiration.
ICE Brent June futures <LCOc1> fell $1.93 to settle at $77.18
a barrel on the day the contract expired.
Stockpiles of crude at Cushing, Oklahoma, the delivery hub for
the U.S. contract's West Texas Intermediate benchmark crude, have
risen the last eight weeks to a record 37 million barrels, pushing
front-month U.S. crude down relative to both more distant futures
contracts and the alternative global crude benchmark, Brent.
The front-month U.S. crude contract's deficit to the next
month's contract <CL-1=R>, known as a contango, narrowed on Friday
and at settlement was at $3.82, after ending at $4.59 on
Thursday.
The June Brent contract's Friday price slump at expiration
narrowed its premium to the U.S. contract to $5.57 at settlement,
from $5.71 on Thursday. The premium hit $6.57 on Thursday, the
widest in 15 months, but only reached $6.27 intraday on Friday.
"The specter of large crude oil inventories seems to be
weighing on markets much more than before, and has been
instrumental in pressuring prices, widening the contangos and
contributing to Brent's expanding premium over WTI," said Edward
Meir of MF Global.
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For a graphic of the WTI contango, click:
http://graphics.thomsonreuters.com/gfx/AB_20101405104110.jpg
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The International Energy Agency this week trimmed its 2010
global oil demand forecast by 50,000 barrels per day to 1.62
million bpd. The IEA said the Greek debt crisis could dent oil
consumption if it spreads to other countries such as Spain,
Portugal and Italy. []
This contrasted with the raised 2010 demand growth forecasts
from the Organization of the Petroleum Exporting Countries and
U.S. Energy Information Administration. [] []
On Monday, oil rose sharply following the announcement of a
rescue package of almost $1 trillion, led by the European Union
and the International Monetary Fund, for debt-laden European
economies. It slumped the next four sessions.
Money managers cut net crude oil long positions on the New
York Mercantile Exchange in the week to May 11, U.S. Commodity
Futures Trading Commission data showed on Friday.
[].
(Additional reporting by Emma Farge in London, Alejandro
Barbajosa in Singapore)
