Oil prices fell below $70 a barrel Friday amid concerns that Europe's financial crisis may stifle a global economic recovery and depress demand for crude.

By early afternoon in Europe, benchmark crude for June delivery was down $1.86 to $68.28 a barrel in electronic trading on the New York Mercantile Exchange. The July contract lost $1.68 to settle at $70.80 a barrel Thursday.

Crude has fallen about 20 percent so far this month after touching an 18-month high of $87.15 on May 3 as investor confidence tumbled amid fears deep government spending cuts in Greece, Spain, Italy and Portugal to stave off a debt default will hurt European economic growth.

"There are clearly fears that the announced fiscal consolidation measures could sharply curb economic growth and oil demand in Europe," Commerzbank said in a report.

Oil had plunged to $32 a barrel in December 2008 from $147 five months earlier as a U.S. financial crisis plunged the global economy into recession.

"The euro-zone's problems are a painful reminder that the global financial crisis has only been partly resolved by transferring it from the banking sector to the public finances," Capital Economics said in a report.

"It would be wrong to assume that commodity prices will recover to their immediate pre-crisis levels as if nothing had happened in the meantime."

Capital Economics said it expects crude prices to fall to $60 a barrel at the end of the year.

In other Nymex trading in June contracts, heating oil fell 0.60 cent to $1.8959 a gallon, and gasoline dropped 0.90 cent to $1.9555 a gallon. Natural gas slid 1.4 cents to $4.092 per 1,000 cubic feet.

In London, the Brent crude July contact was down 35 cents to $71.49 on the ICE futures exchange.