crude for July delivery was down 24 cents at $87.58

NYMEX-Crude extends losses, heads for worst month since 2008

Wed May 30, 2012 

TOKYO May 31 (Reuters) - U.S. crude extended losses into a third straight session on Thursday, on track for their biggest monthly drop since the financial crisis of 2008, as risk aversion kept its grip on markets amid mounting tensions about the euro zone debt crisis.

FUNDAMENTALS

* NYMEX crude for July delivery was down 24 cents at $87.58 a barrel by 0103 GMT, after settling down $2.94 at $87.82 on Wednesday. Prices were headed for a loss of more than 16 percent for May, the biggest monthly drop since late 2008.

* London Brent crude for July delivery was down 22 cents at $103.25 a barrel, after settling down $3.21 at $103.47. Brent prices are down more than 13 percent so far this month, heading for the biggest monthly decline since May 2010.

* The European Commission threw Spain two potential lifelines, offering more time to reduce its budget deficit and offering direct aid from a euro-zone rescue fund to recapitalize distressed banks.

* In Greece, latest polls showed parties for and against a bailout neck-and-neck or very close to each another, ahead of a June 17 election that may decide whether Greece remains in the euro.

* U.S. crude inventories fell by 353,000 barrels last week, according to industry group the American Petroleum Institute's weekly report, against expectations stocks had risen.

Gasoline stocks rose 2.1 million barrels and distillate stocks fell 1.3 million barrels, the API said. Gasoline stocks were expected to be down 800,000 barrels and distillate stocks were seen down 100,000 barrels.

* U.N. nuclear inspectors displayed new satellite imagery on Wednesday indicating that some small buildings had been dismantled and other possible clean-up work undertaken at an Iranian military site they want to visit.

MARKETS NEWS

* U.S. stocks tumbled on Wednesday as surging bond yields in Spain andItaly ratcheted up tensions in financial markets about Europe's ability to solve its growing debt crisis.

* The euro weakened 1 percent in value against the U.S. dollar on Wednesday, slumping to a near two-year low as Europe's sovereign debt crisis and banking sector concerns sapped investors' resolve and pushed them to sell the euro zone common currency.

DATA/EVENTS

* The following data is expected on Thursday: (Time in GMT)

- 0500 Japan Construction orders/Apr

- 0545 Swiss GDP/Q1

- 1130 US Challenger layoffs/May

- 1230 US preliminary GDP/Q1

- 1230 US Initial jobless claims

- 1345 US Chicago PMI/May

- 1430 US EIA underground natural gas stocks

- 1500 US EIA petroleum stocks and output data

- NYMEX gasoline and heating oil June contracts expire (Reporting by Osamu Tsukimori; Editing by Himani Sarkar)