Oil continues three-week slide

Oil prices continued their three-week slide on Tuesday, pulled down by falling global stock markets, a declining euro and saber-rattling in Korea.

Benchmark crude for July delivery dropped US$1.82 to US$68.39 a barrel on the New York Mercantile Exchange.

On Monday the contract rose 17 cents to settle at US$70.21.

Oil prices have fallen 22 per cent in the past three weeks, a slump that started with worries about the European debt crisis escalating and spreading globally.

Stock markets around the world fell Tuesday on worries that Europe's problems will slow global growth and demand for crude and gasolene.

The Dow Jones Industrials was down to 9,920 points at mid-afternoon.

Oil prices have been volatile for months, with swings of US$10 to US$15 per barrel since last fall.

Traders wonder whether crude has reached a bottom and will go back up or if it has further to fall.

The big spill in the Gulf of Mexico that has been spewing about 5,000 barrels of crude per day since April 20 has not affected oil prices. Tankers bringing imported oil to Gulf ports and taking refined product out continue to work around the huge slick at the mouth of the Mississippi River.

The drop in crude prices continues to work its way into retail gasolene prices. Pump prices fell 1.3 cents overnight to a national average of US$2.78 per gallon, according to AAA, Wright Express and Oil Price Information Service.

Prices are down US7.9 cents in the past week and US7.4 cents over the past month. They are still US35.6 cents higher than a year ago.

In other Nymex trading in June contracts, heating oil fell US3.46 cents to US$1.8647 a gallon, and gasolene dropped 4.50 cents to $1.9258 a gallon.

Natural gas rose 0.6 cent to US$4.023 per 1,000 cubic feet.

In London, Brent crude fell US$2.07 to US$69.10 on the ICE futures exchange.

- AP