WASHINGTON, May 8: The first positive impact of the Iranian president’s letter to his US counterpart was on the market where oil tumbled to $68.50 a barrel on Monday from a record high of above $75 two weeks ago.

On the New York Mercantile Exchange, US light crude for June delivery sank $1.69 to $68.50 a barrel, extending last week’s losses when crude sank 6 per cent from its recent record high above $75 a barrel.

The price of London’s Brent North Sea crude for June delivery dived $1.32 to $69.50 per barrel in electronic deals, after hitting $69.06 — the lowest level since April 11.

The latest decline brought crude prices more than $6 below the highs touched two weeks ago, but prices are still up about 15 per cent since the start of the year.

The news about the Iranian letter came ahead of a meeting of the five permanent members of the UN Security Council in New York to discuss a draft resolution on Iran that was introduced last week by the US, France and Britain.

The draft resolution, drawn up under Chapter 7 of the UN Charter, demands Tehran give up its nuclear programme or face penalties that could include economic sanctions. The tension had an adverse affect on the oil market as traders feared that Iran could retaliate to the proposed sanctions by reducing or even temporarily suspending its oil production. Iran is the world’s fifth largest producer of oil and the fear of an Iranian retaliation kept oil prices high.