Oil drops towards $69 as risk aversion returns

The greenback gained more than 0,6 percent against a basket of currencies on Tuesday, while Japan's Nikkei average fell 3,06 percent to its lowest in more than five months following a steep drop in Wall Street.

"The market got ahead of itself, building in a lot of anticipation that the economy and oil demand would recover," said Tony Nunan, a risk manager with Tokyo-based Mitsubishi Corp., referring to US crude's 19-month high above $87 hit in early May. "The fact that the dollar is strengthening is a sign of risk aversion and deleveraging. People are moving away from crude oil," Nunan said, adding that Fibonacci chart analysis showed prices would head towards $66,24.