Oil falls to $70

By Annalyn Censky, staff reporter

NEW YORK (CNNMoney.com) -- Oil prices fell around $70 a barrel, as investors remained wary that Europe's debt crisis and growing oil stockpiles will cut demand for fuel.

What prices are doing: Crude for July delivery, which becomes the active contract Friday, slipped 76 cents, or 1.07%, to settle at $70.04 a barrel.

Click the chart for the current price of oil and other commodities.

The day before, the June futures contract settled at $68.01 when it expired.

Gasoline prices fell for the 15th consecutive day, slipping to $2.827 a gallon from $2.840 the day before, according to a survey by motorist group AAA.

What's moving the market: U.S. equities posted modest gains in the afternoon after a choppy morning. Investors have pulled out of oil amid volatile stock market, seeking safe-havens like Treasurys or the dollar.

Traders have been worried that economic instability in Europe may cut demand for fuel. Oil prices, as a result, have fallen about $15 per barrel in a month.

Investors also harbor some concerns about growing oil stockpiles that seem to be rising too fast to keep up with demand.

Weekly supply reports issued on Wednesdays by the U.S. Energy Information Administration, have shown current oil supplies exceed inventory limits across all three major categories: crude, gasoline and distillates.

What analysts are saying: "We have plenty of supply and diminished demand in the U.S. even though we're supposed to be going to into the demand season for gasoline," said Michael Smith, owner T & K Futures and Options.

Oil traders will be closely watching the stock market for cues, but until they're convinced Europe's debt crisis is under control and U.S. crude stockpiles are better in line with demand for fuel, they don't expect to see oil prices post any major gains. Prices could easily fall as low as $65 a barrel next week, Smith said. To top of page

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