* Euro near four-year lows versus dollar
* For a technical view, click: []
* Coming up: U.S. April leading indicators; 1400 GMT
(Recasts, previous SINGAPORE)
By Emma Farge
LONDON, May 20 (Reuters) - Oil eased under $70 a barrel on
Thursday and within $1 of seven-month lows touched the previous
session as concerns about the impact of the European fiscal
crisis on fuel demand weighed on sentiment.
Worries that the Greek debt crisis could spill over to other
economies has knocked oil prices down nearly 20 percent from the
$87.15 a barrel peak in early May.
U.S. crude <CLc1> for June delivery fell 17 cents to $69.70
a barrel by 0957 GMT, after touching the lowest level since
October of $69.11 on Wednesday. It earlier rose more than $1 as
traders rushed to cover short positions ahead of the contract's
expiry today.
The July contract fell 4 cents to $72.44 a barrel by the
same time. ICE Brent futures <LCOc1> were down 22 cents at
$73.47 a barrel.
"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 traded near four-year lows against the dollar on
Thursday as uncertainty over unity in the euro zone prevailed
following Germany's solitary move to ban naked short-selling on
Wednesday. [] <EUR=>
A weak euro tends to weigh on oil prices as it makes
dollar-denominated commodities more expensive for holders of tje
currency.
The German ban has also curbed buying appetite for
commodities such as oil and contributed to the price slide,
analysts said.
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For a chart on the returning oil/dollar correlation with
Europe risk, click:
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BELOW RANGE
Oil prices this week have fallen below the $70-$80 a barrel
range that many of the members of the Organization of the
Petroleum Exporting Countries (OPEC) 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. []
Some analysts attribute the weakness of U.S. crude partly to
a regional supply glut at the Cushing delivery point for West
Texas Intermediate (WTI) where stocks are at a record 37.9
million barrels.
The sell-off in the alternative global oil benchmark ICE
Brent has been less pronounced than on WTI and the spread
between the two contracts was around $3 on Thursday, with Brent
at a a premium.
For some, U.S. weekly inventory data on Wednesday showing a
smaller-than-expected 200,000 barrel rise in crude stocks has
helped define the bottom of the market which they identify near
the psychologically important $70 a barrel level.
The data also showed a surprise decline in distillates and a
smaller than forecast drop in gasoline, stirring hopes that fuel
demand in the number one oil consumer is improving. []
Oil demand is historically weakest in the second quarter
between the northern hemisphere winter heating oil season and
the summer gasoline season.
Analysts who use past price moves to predict future
direction said U.S. crude's next support level is around $69 a
barrel and that this should form a base for a possible rally.
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For a technical chart, see:
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Key macroeconomic data due out of the U.S. later on Thursday
including weekly jobless claims at 1230 GMT and leading
indicators for April at 1400 GMT are set to provide further
market direction, analysts said.
Eurozone consumer confidence data could also give prices a
steer, they added
(Additional reporting by Judy Hua in Singapore; Editing by
William Hardy)
