Oil extended losses on Tuesday as the U.S. stocks fell for a third day.

Light, sweet crude for October delivery fell 1.91 dollars, or 2. 7 percent, to settle at 68.05 dollars a barrel on the New York Mercantile Exchange.

Commodities markets have tracked stock indexes closely in recent months as dealers view equities as a lead indicator of economic performance. After a sell-off spurred by the stock turbulence in China, Wall Street fell for a third day on fears of more losses in the banking sector, pulling oil to negative territory from its modest gains in the morning session.

Meanwhile, dollar gained against the euro and most of other major currencies, reducing oil's appeal as an alternative investment to hedge against inflation.

In London, Brent Crude for October delivery fell 1.67 dollars, or 2.4 percent, to 67.98 dollars a barrel on the ICE Futures exchange.