Oil holds near $120

By Anshuman Daga

SINGAPORE (Reuters) - Oil prices held near record highs on Tuesday after storming past $120 a barrel, pushing up gold prices and stalling a recovery in Asian stocks.

European equities were set to open flat to lower amid a flurry of results led by Swiss bank UBS (UBSN.VX), which unveiled 5,500 job cuts and said financial market conditions remained tough. UK stocks were expected to dip as trading resumes after a holiday.

The U.S. dollar was broadly weaker as doubts resurfaced on about the health of the U.S. economy, while record oil prices lifted currencies of major commodity exporters.

The relentless surge in prices of commodities from oil to rice is a key concern for central banks, although some investors have started to price in the view that the worst of the credit crisis and the U.S. economic slowdown could be over.

By 7 a.m. BST, MSCI's measure of Asian stocks outside Japan .MSCIAPJ was down 0.2 percent at 498.2, slipping from a four-month high hit on Monday.

The MSCI benchmark has risen 2 percent in the last two sessions but is down 6 percent so far this year. Japan remained closed for national holidays for the second day in a row.

U.S. light crude for June delivery, a global benchmark, edged up one cent to $119.98 a barrel. It jumped more than $4 on Monday to a record high of $120.36 on supply concerns in Iran and Nigeria.

"A lot of this is supply-driven, with the market very vulnerable to any disruption in supplies," said Mark Pervan, a senior commodities analyst at Australian & New Zealand Bank.