Crude futures dropped more than 2 U.S. dollars a barrel Tuesday morning after U.S. Federal Reserve Chairman Ben Bernanke said more rates cut are unlikely.
Light, sweet crude for July delivery plunged to 125.54 dollars a barrel, trading down 2.22 dollars, as of 11:27 EST (1530 GMT) on the New York Mercantile Exchange. Crude prices topped a all-time peak of 135.09 dollars a barrel on May 22.
Bernanke indicated in a speech on Tuesday morning that further rate cuts are unlikely, which immediately shored up the dollar against the euro and other major currencies. Many investors who have bought oil as a hedge against inflation sold on Bernanke's comment.
In London, Brent crude for July delivery fell 1.27 dollars to 126.75 dollars a barrel on the ICE Futures Exchange.