Oil prices fell more than 8% Monday, heading for their biggest one-day loss in seven weeks, as an upbeat earnings report from Bank of America Corp. was not enough to dispel worries that the financial crisis is worsening. Helping oil move lower, U.S. stocks fell broadly after Bank of America reported better-than-expected first-quarter earnings but warned that losses from souring loans will get worse rather than better. A stronger dollar and excessive crude inventories also pushed oil lower. Crude oil for May delivery fell $4.08, or 8.1%, to $46.25 a barrel on the New York Mercantile Exchange. Oil hasn't ended down more than 8% since March 2 and hasn't closed below $47 since March 13. The May contract expires Tuesday, further pressuring the front-month contract as speculators who don't want physical oil have to sell the contract before expiration to avoid taking delivery. The more-active June contract dropped $3.78, or 7.2%, to $48.69 a barrel. "The dollar is a bit higher as well as the stock market is down, so you're getting hit on the two fronts that have been moving oil prices," said Phil Flynn, vice president at Alaron Trading in Chicago. As the front-month contract approaches expiration, prices could see "more choppiness," he said. However, "if the stock market stabilizes, we'll see the price of oil start to come up," Flynn added. Crude inventories in the U.S., the biggest oil consumer, stood at the highest level in nearly two decades as demand remained week, the Energy Information Administration reported last week. On Wall Street, stocks gave up their six-week gains with traders taking profits. Although the Bank of America earnings report was better than expected, concerns about the banks remained after a Wall Street Journal report showed that banks receiving government money were lending less and less. See Bank of America story. In the currency markets, the U.S. dollar rose against the euro and the British pound, as the head of the European Central Bank signaled that policy makers are weighing a further rate cut and will announce new measures at its May meeting. The dollar index , which tracks the greenback against a trade-weighted basket of rival currencies, pushed higher to trade at 86.42 in recent action, after having finished below 86.00 last week. Dollar strength typically weighs on dollar-denominated commodities such as oil because it makes them more expensive for holders of other currencies. "A stronger U.S. dollar and renewed concerns regarding an economic recovery once again drove oil prices down," said analysts at Commerzbank. The analysts expect oil prices to fluctuate from $45 to $55 a barrel in the short term. The International Monetary Fund will slash its forecast for global economic growth next year to between 1.7% and 1.9% from 3.0%, South Korea's Munhwa Ilbo newspaper reported Monday, citing a person familiar with the matter. The fund will also slash its forecast for South Korea's 2010 economic growth to 1.5% from 4.2%, according to the report. Meanwhile, the Conference Board said Monday that the recession may continue through the summer, though its intensity could ease. The index of leading economic indicators fell 0.3% in March, following an upwardly revised 0.2% dip in February. Also in energy trading, May reformulated gasoline fell 6.48 cents, or 4.3%, to $1.4279 a gallon and May heating oil dropped 7.79 cents, or 5.5%, to $1.3446 a gallon. May natural gas futures dropped 12.9 cents, or 3.5%, to $3.60 per million British thermal units.

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