Oil drops to near $68 as stock markets, euro fall

[May 25, 2010]  SINGAPORE (AP) -- Oil prices fell to near $68 a barrel Tuesday in Asia as plunging regional stock markets and a weaker euro rattled the confidence of commodity investors.

Benchmark crude for July delivery was down $1.85 to $68.36 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract advanced 17 cents to settle at $70.21 on Monday.

Oil has plummeted 22 percent from $87.15 a barrel earlier this month as a falling euro made dollar-based crude more expensive for investors holding the European currency.

Investor concern that Europe's debt crisis could undermine global economic growth has also hurt stock markets, which oil traders watch as a measure of overall confidence.

All major Asian stock markets fell Tuesday, following a 1.2 percent pullback in the Dow Jones industrial average Monday. The euro dropped to $1.2226 from $1.2342 on Monday.

"The market appeared to acquiesce to the weakness in the stock market," Ritterbusch and Associates said in a report. "The primary drivers of this month's price plunge remain heavily skewed toward the bearish side."

In other Nymex trading in June contracts, heating oil fell 3.8 cents to $1.861 a gallon, and gasoline dropped 3.95 cents to $1.931 a gallon. Natural gas was off 0.1 cent at $4.016 per 1,000 cubic feet.

In London, the Brent crude July contact was down $1.83 to $69.34 on the ICE futures exchange.

[Associated Press; By ALEX KENNEDY]

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