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Oil prices fall as Greece debt crisis talks drag on

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Oil prices fell on Thursday as traders kept an eye on Greece's prolonged negotiations with creditors to avoid a debt default and possible exit from the eurozone.

[NEW YORK] Oil prices fell on Thursday as traders kept an eye on Greece's prolonged negotiations with creditors to avoid a debt default and possible exit from the eurozone.

US benchmark West Texas Intermediate for August delivery fell 57 cents to US$59.70 a barrel.

Brent North Sea crude for August, the global benchmark, closed at US$63.49 a barrel in London, down 29 cents from Wednesday's settlement.

"The Greece headlines continue to dominate the trade... and I think there is an inability (to rally) when there's this overhanging Europe," said Phil Flynn of Price Futures Group.

At Citi Futures, Tim Evans said that traders were bracing for possible reactions to Greek debt talks "although we see a fatigue in the markets running parallel to the fatigue of finance ministers trying to negotiate a deal."

Greece and its European Union and International Monetary Fund creditors failed to break the deadlock in emergency talks on Thursday to reach a bailout deal, raising fresh fears of a default by Athens that could send it crashing out of the euro bloc.

Citi's Evans noted that oil price volatility was at a seven-month low after trading chopped sideways over the past six weeks. He warned that a breakout on prices could come, either pulling the market higher or lower. "With global supply still outpacing demand, we think that break will be to the downside," he said.

Traders also kept an eye on the looming June 30 deadline for Iran and six major powers to reach a landmark nuclear deal that would prevent Tehran from developing nuclear weapons in exchange for lifting sanctions, including on its oil exports.

A senior US official said Thursday that the high-stake negotiations may "slip" beyond the deadline.

"There's a big possibility that we could rally if they miss that deadline," Mr Flynn said.

AFP