Oil prices fell
more than $1 on Monday, with U.S. crude dropping below $59 per barrel to
its lowest in almost three weeks, after Greece imposed capital controls
as lenders refused to extend the country's bailout.
Financial
markets weakened across the board, with the euro dropping to its lowest
in almost a month and share prices in Asia tumbling, amid worries of
cash-strapped Greece being forced out of the euro zone.
"As far as the oil market is concerned, the potential ramifications are downward," said Ric Spooner, chief market analyst at Sydney's CMC Markets. "If the situation drags out then that will be a dent to confidence for investors."
Brent crude LCOc1 was down $1 at $62.26 a barrel by 0707 GMT, near a one-week low of $62.20 hit earlier in the session. It closed up 6 cents on Friday.
U.S. crude
CLc1 was down $1 at $58.63 a barrel, after falling to $58.56 earlier,
the lowest since June 9. The benchmark closed down 7 cents on Friday.
Oil
prices are expected to be volatile this week due to the Greek situation
and negotiations on Iran's disputed nuclear program going on in Vienna,
Phillip Futures said.
Oil prices would immediately tumble if Iran and six world powers agreed a nuclear deal, Phillip Futures said.
Iran is backtracking from an interim nuclear agreement with world powers three months ago, Western officials suggested on Sunday, as U.S. and Iranian officials said talks on a final accord would likely run past a June 30 deadline.
Securing an agreement would end the nuclear standoff between Iran and the West. This could eventually lead to suspending sanctions and allow Tehran to raise crude exports, adding to an already well-supplied world market.
"The surplus in the market isn't going to clear terribly quickly. Indeed, it could be somewhere in the middle of 2016 till we start eating into inventories on a global basis so we’re relatively cautious in terms of upside," said David Fyfe, head of market research & analysis at Gunvor Group.
"As far as the oil market is concerned, the potential ramifications are downward," said Ric Spooner, chief market analyst at Sydney's CMC Markets. "If the situation drags out then that will be a dent to confidence for investors."
Brent crude LCOc1 was down $1 at $62.26 a barrel by 0707 GMT, near a one-week low of $62.20 hit earlier in the session. It closed up 6 cents on Friday.
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Oil prices would immediately tumble if Iran and six world powers agreed a nuclear deal, Phillip Futures said.
Iran is backtracking from an interim nuclear agreement with world powers three months ago, Western officials suggested on Sunday, as U.S. and Iranian officials said talks on a final accord would likely run past a June 30 deadline.
Securing an agreement would end the nuclear standoff between Iran and the West. This could eventually lead to suspending sanctions and allow Tehran to raise crude exports, adding to an already well-supplied world market.
"The surplus in the market isn't going to clear terribly quickly. Indeed, it could be somewhere in the middle of 2016 till we start eating into inventories on a global basis so we’re relatively cautious in terms of upside," said David Fyfe, head of market research & analysis at Gunvor Group.
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