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Oil prices recover amid Greece, supply worries

[SINGAPORE] Oil prices recovered on Tuesday thanks in part to a softer dollar despite worries over supply and the breakdown in Greece's debt talks, an analyst said.

In mid-afternoon Asian trade, US benchmark West Texas Intermediate for July was up 64 cents at US$60.16 while Brent futures for August, a new contract, were up 35 cents at US$64.30.

"Oil prices have fallen over three per cent since June 10, so it is possible that traders feel it is a good time to cover some of their short positions," Bernard Aw, market strategist at IG Markets in Singapore, told AFP.

"A softer US dollar could have also contributed to the modest recovery. If you look from a wider perspective, Brent crude remained stuck between US$60 and US$70 for the past two months, as underlying conditions did not change significantly."

Greece and its creditors are locked in a stalemate after loan talks collapsed over the weekend, bringing Athens just two weeks away from a catastrophic default on its debt, which could be followed by its exit from the eurozone.

Both sides insisted on Monday they were willing to engage, but without making a decisive step to break the deadlock.

The talks concerning the release of the 7.2 billion euros in rescue funds remaining in Greece's bailout have dragged on for five months.

Before Tuesday's mild rebound in crude futures prices, sentiment was weighed down by worries that US oil output is not declining and Saudi Arabia could further ratchet up production.