LONDON: Oil fell $3 on Wednesday to below $80 a barrel for the first time since March, taking the week's losses to 7.5 percent as the Greek debt crisis shook markets and rising U.S. crude stocks indicated soft demand. Prices fell to a low of $79.15, exactly $8, or 9 percent, below Monday's 19-month high of $87.15. Rising concerns that Greece's debt crisis could spill into other euro zone members and derail the global recovery have seen oil futures shed almost 40 percent of gains since February. "The volatility is extreme, I haven't seen anything like this in a long time," one London-based trader said. "It's all about the slump in the euro today. All commodities are getting absolutely hammered." US crude for June delivery was down $2.90 at $79.84 a barrel by 1245 GMT. Prices are still around double the level they were at the start of 2009. London Brent crude was down $2.66 at $82.99 a barrel. On Wednesday, Finland's finance minister said there is a risk Greece's financial problems could spread to Spain or Portugal, while a senior member of Germany's ruling party said concerns remain that an international aid package for Greece could fail. The euro fell to its lowest level against the dollar since April 2009 on Wednesday, touching $1.2802. The single currency is down around 5 cents against the dollar since Friday. Dollar-priced commodities like oil are undermined by strength in the greenback as they become more expensive for holders of other currencies. Rising risk aversion is also a factor as investors pull money out of volatile assets like oil. Industrial metals like copper, zinc and aluminum were all down by between 4 and 5 percent on the day. "So much good news is already priced into this market that when sentiment turns gloomy, as it has done with Greece and Spain, we're bound to see jitters from time to time," said Helen Henton, head of commodity research at Standard Chartered. "We are also expecting to see a big increase in U.S. crude oil inventories later today." Crude oil inventories in the world's largest energy consumer rose by 3 million barrels in the week to April 30, the American Petroleum Institute said on Tuesday. Analysts polled by Reuters had predicted a 1.1 million barrel rise. Gasoline stocks also rose, climbing by 1.5 million barrels against analyst expectations for a 200,000 barrel build. Figures from the US government's Energy Information Administration are due at 1430 GMT on Wednesday. US demand for gasoline at the pumps, which accounts for more than 10 percent of total world oil demand, was down 2.3 percent on last year in the week to April 30, the Mastercard SpendingPulse report showed on Tuesday. Oil spill workers raced against time in the Gulf of Mexico, hoping to seize on at least one more day of calm weather in their fight to contain a huge and growing slick before winds turn against them. One of the three leaks from the ruptured Gulf of Mexico undersea well owned by BP has been capped, but oil is still flowing out at a rate of 5,000 barrels (210,000 gallons) per day, the National Oceanic and Atmospheric Administration (NOAA) said on Wednesday. Crude oil prices have not been seriously affected by the oil spill after a deadly April 20 rig explosion triggered a breach in BP's well. –Additional reporting by Judy Hua in Singapore
