Commodities: Oil futures settle at $68.75 a barrel

Date: Wednesday 26 May 2010

Crude oil tumbled over 2% on Tuesday as global markets suffered losses and fresh worries about European debt knocked sentiment.

US light crude oil for July delivery dropped $1.46 to settle at $68.75 a barrel on the New York Mercantile Exchange.

The market will be watching US weekly governement oil inventory data, due out Wednesday, as worries persist over a supply surplus in the US. Late Tuesday the American Petroleum Institute said crude oil stocks rose 616,000 barrels. Gasoline stocks fell 3.194 m barrels while distillate stocks rose 1.518m barrels.

Meanwhile rising tensions amongst North and South Korea put pressure on stocks markets across the globe, sparking a flight to the dollar and other safe haven investments.

Among precious metals gold mustered modest gains on Tuesday as traders shunned other commodities and sought safety from the plunging euro. The yellow metal was in demand as credit worries in Europe continue while increasing tensions in the Koreas also tipped global equities into the red.

Reports suggest that North Korea's Kim Jong-il has ordered North Korean’s army to be ready for war.

Gold for June delivery rose $4 to $1,198 an ounce on the Comex division of the New York Mercantile Exchange.