Crude ends under $80 for the first time since mid March

SAN FRANCISCO (MarketWatch) -- Oil prices settled under $80 a barrel on Wednesday, pulled down by a stronger U.S. dollar, concerns about the political unrest in Greece and the state of other European economies, and a higher-than-expected rise in crude inventories.

Crude oil for June delivery slumped $2.77, or 3.4%, to $79.97 a barrel on the Comex division of the New York Mercantile Exchange. That is the lowest price for a most-active contract since March 15, according to FactSet Research.

Losses were deeper mid-morning and in the last hour of trading.

"People are worried that the bull market is over, that maybe we are seeing the tipping point," said Michael Lynch, president of Strategic Energy & Economic Research, in Winchester, Mass.

Macroeconomic backdrop and the falling euro at the center of their concerns dominated trading.

Investors are feeling that prices pushing towards $90 a barrel recently were not "appropriate for this point in the economic recovery," Lynch said. "People were wondering when it would be time to sell, and it looks like the sell-off is here."

The euro fell to $1.2825 but came off lows hit earlier in the session, while the dollar index /quotes/comstock/11j!i:dxy0 (DXY 83.96, -0.12, -0.14%) rose 0.9% to 84.06.

Worries about a potential debt crisis in Europe flared up again Wednesday as Moody's Investors Service placed Portugal's debt under review for a possible downgrade and violence erupted in Greece following a nationwide strike. Three people were killed after fires broke out at riots near an Athens bank. Read more on Greek violence.

The Energy Information Administration on Wednesday said crude-oil inventories rose 2.8 million barrels in the week ended April 30, which included a 1.7 million increase in inventories in Cushing, Okla., the delivery point for Nymex oil.

Analysts surveyed by Platts had expected crude stocks to increase by 1.54 million barrels.

Gasoline stockpiles rose by 1.2 million, the EIA said, when the expectation was of a modest rise of 200,000 barrels.

Refineries operated at 89.6% of their operable capacity, the EIA said. The refinery utilization rate expected by the analysts polled was 88.66%.

Gasoline futures were the worst-hit among energy products on Monday. Gasoline for June delivery declined 10 cents, or 4.4%, to $2.22 a gallon, reverting to prices last seen in late March.

Natural gas for June delivery retreated 2 cents, or 0.6%, to $3.99 per million British thermal units.

Analysts polled by Platts expect the EIA to report an increase by 80 to 84 billion cubic feet for natural gas in storage in the week ended April 30. The agency releases its weekly report on natural-gas storages Thursday at 10:30 a.m. Eastern.

Oil trimmed some its losses earlier after the April ISM nonmanufacturing index. The index came in under expectations at 55.4, unchanged with March's level, but investors took heart it didn't show an economic contraction.

News that private-sector companies added 32,000 jobs in April, according to the ADP employment report released Wednesday, did little to change oil's direction. The increase in ADP employment was in line with expectations.