* API says Cushing crude stocks hit record high
* Worries over tighter financial regulation in U.S., Europe
* Coming up: EIA inventory report 1430 GMT
* For a technical view, click: []
(Updates prices, previous SINGAPORE)
LONDON, May 19 (Reuters) - Oil fell to $68 a barrel after
touching its lowest in more than seven months on Wednesday,
pressured by high U.S. stockpiles and as concern over tighter
financial regulation sparked a move away from riskier assets.
The decline in oil for a third day followed Tuesday's report
from industry group the American Petroleum Institute showing
crude inventories at the storage hub at Cushing, Oklahoma, rose
to a record high.
Also Germany's move to ban naked short-selling of some
securities, including the stocks of its 10 most important
financial institutions, hit equities and the euro as investors
moved out of riskier assets.
"It's all financial markets-driven," said Carsten Fritsch,
commodities analyst at Commerzbank. "The news regarding
short-selling was quite surprising and it led to a rapid
strengthening of the U.S. dollar and falling equity markets, and
this affects commodity prices."
U.S. crude <CLc1> for June delivery fell as low as $67.90,
its lowest intraday level since Sept. 30, 2009. By 0910 GMT, the
contract was down $1.23 at $68.18 a barrel. Brent crude <LCOc1>
was down 75 cents at $73.68.
Investors moved into safe havens such as the dollar and the
yen on fears tighter financial regulation would derail the
global economic recovery. The euro fell to a four-year low
against the dollar.
Analysts who use past price moves to predict future
direction said U.S. crude's next support level is around $66 a
barrel, almost $20 short of the 19-month high of $87.15 prices
reached on May 3.
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For a technical chart, see:
http://graphics.thomsonreuters.com/gfx/WT_20101905090410.jpg
For a chart on oil/dollar correlation returns with Europe
risk, click:
http://graphics.thomsonreuters.com/gfx/RSW_20101905125817.jpg
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Oil markets look well supplied with inventories in the
United States on the rise and the Organization of the Petroleum
Exporting Countries pumping 2 million barrels a day (bpd) more
than its official output limit.
Tuesday's API data showed crude inventories at Cushing rose
914,000 barrels last week to a record high of 37.99 million
barrels, although overall crude stockpiles fell unexpectedly.
[]
The U.S. government's Energy Information Administration
issues its weekly snapshot on inventories at 1430 GMT. Crude
inventories are expected to rise by 700,000 barrels. []
(Reporting by Florence Tan in Singapore and Alex Lawler in
London; editing by James Jukwey)
