(EnergyAsia, May 24 2010, Monday) --- By Darrell Delamaide for Oilprice.com.

Crude oil prices ended just above $70 a barrel on Friday May 21 after dipping below that threshold earlier in the week ending May 21. The benchmark June contract for West Texas Intermediate settled at $68.01 before it expired on Thursday, after falling below $65 a barrel in intraday trading.

The decline from more than $87 a barrel reached earlier in the month is more than 20%, fitting some analysts’ definition of a bear market. Continued weakness below $70 a barrel could send prices tumbling further, into the $50 range, some analysts said.

Passage of financial regulatory reform legislation in the Senate Thursday evening ended most of the uncertainty about how severe measures might be, giving a lift to financial stocks on Friday, and other markets along with them.

The benchmark July contract settled at $70.04 a barrel on Friday, down from its $70.80 close on Thursday, compared with the benchmark price of $71.61 a barrel a week ago.

A continued slide of the euro against the dollar and persistent worries about the fiscal situation of Greece and other European countries continued to roil markets during the week.

Concern about the impact of the euro crisis on global economic growth exacerbated the situation for stocks, leading to a loss of 3% in US stocks on Thursday alone. An unexpected surge in the weekly US jobless claims figures – claims were up 25,000 to 471,000 when experts had forecast a decline – further spooked the equities markets.

In a global flight to safety, investors sought refuge in US debt securities, pushing down Treasury yields in spite of debate about the US deficit. In late Friday trading, 10-year notes were yielding about 3.2% and 30-year bonds 4.1% -- both at their lowest levels since last October. The 30-year bond yield actually dipped below 4% at one point.

Oil inventories continued to rise, according to the weekly report from the US Energy Information Administration, though less than forecast.

But the inexorable rise of stocks at the Cushing, Oklahoma depot where Nymex oil is delivered continued to weigh on the benchmark contract. Stocks at Cushing rose another 917,000 barrels in the week, to a new record of 38 million barrels – which may be nearing full capacity according to some estimates.