Oil slid below $70 on Wednesday ahead of U.S. fuel data expected to show crude stocks at a nine-year high and rising gasoline inventories in the world's top consumer, coupled with losses in other commodity markets.
Investors are showing signs of steering clear of higher-risk markets due to troubles with U.S. mortgage securities and concerns over the rising cost of borrowing.
London Brent crude, currently seen as a better indicator of the global market than U.S. oil, was down 40 cents at $69.77 by 1005 GMT, after falling $1.19 on Tuesday.
U.S. crude was down 54 cents at $67.23.
"The main driver of the market now is the U.S. inventory data for both crude and gasoline," said Tetsu Emori, chief commodities strategist at Japan's Mitsui Bussan Futures.
Analysts estimate U.S. crude inventories, already at the highest since May 22, 1998, rose a further 1.2 million barrels last week, a Reuters poll found. Gasoline inventories were seen up by 1.2 million barrels.
Gasoline supplies have risen since U.S. refineries returned from maintenance, with utilization rates projected to rise by 1.0 percentage point to 88.6 percent of capacity.
(Reuters, 27/06/2007)