Oil declined after talks to form a Greek government failed, setting in motion new elections next month, and sending the euro to a four-month low.

Futures dropped as much as 0.9 percent as Pasok party leader Evangelos Venizelos said Greeks are headed back to the polls. The euro fell against the dollar after the announcement. A weaker European currency reduces the appeal of dollar- denominated raw materials as an investment. Oil advanced earlier after manufacturing in the New York region expanded.

Oil in New York advanced as much as 0.7 percent earlier after the Federal Reserve Bank of New York’s general economic index increased in May. Confidence among U.S. homebuilders jumped to a five-year high.

Brent oil climbed after economic growth in Germany, Europe’s largest economy, beat economists’ projections. German gross domestic product rose 0.5 percent in the first quarter, the Federal Statistic Office said in Wiesbaden today. Economists predicted a 0.1 percent gain.

An Energy Department report tomorrow will probably show that U.S. crude stockpiles advanced 1.5 million barrels to 381 million in the last week, according to the median of 10 analyst estimates in a Bloomberg survey. That would be the highest level since August 1990.

Crude oil for June delivery traded at range of $93,91 - $95,48 a barrel on the New York Mercantile Exchange. Brent oil for June settlement gained 33 cents, or 0.3 percent, to $111.90 a barrel on the London-based ICE Futures Europe exchange.

The price of gold is reduced to the background of the continuing concerns about the political situation in Greece, which has not yet formed a new cabinet after the early parliamentary elections.

At the same time, despite the uncertainty in Greece, which has increased speculation about a possible withdrawal from the eurozone countries, the head of the Eurogroup Jean-Claude Juncker, said yesterday that such a question at a meeting of eurozone finance ministers (Eurogroup) on Monday was not discussed.

To limit the decline in gold prices helped the high demand from the jewelry industry of Asian countries - India, Thailand and Indonesia.

Earlier Tuesday, the value of the metal support provided preliminary evidence that the German economy in the first quarter of 2012 increased by 0.5% compared with the previous quarter. Analysts had expected German GDP in the quarter grew by only 0.1% over the fourth quarter of 2011.

The cost of the June gold futures on the COMEX fell today to $ 1546.8 an ounce and is currently trading at around $ 1552.1 an ounce.

Change % Change Last

Gold 1,557 -27 -1.69%

Oil 94.22 -1.91 -1.99%