Oil prices down in Asian trade

[SINGAPORE] Oil prices fell in Asia on Monday as dealers fretted over a collapse in Greece's debt talks and a possible return of Iranian supplies disrupted by international sanctions, analysts said.

US benchmark West Texas Intermediate for July delivery fell 20 cents to US$59.76 while Brent crude for July eased 37 cents to US$63.50 in mid-morning trade.

Markets are "closely tracking the Greek debt crisis and the ongoing negotiations between Iran and the big six powers," said Sanjeev Gupta, head of the Asia-Pacific oil and gas practice at business consultancy firm EY.

Crunch negotiations between Athens and its creditors fell apart on Sunday, fuelling fears the cash-starved government was heading irreversibly into the financial abyss with a huge IMF debt payment due at the end of the month.

Analysts said oil prices were particularly hit as dealers fled the euro for the US dollar, strengthening the greenback. A stronger US dollar makes crude more expensive for buyers using weaker currencies.

Investors are also focusing on Iran ahead of a June 30 deadline for the Islamic republic and world powers to come to an agreement on curbing Tehran's nuclear programme.

Six global powers - Britain, China, France, Germany, Russia and the United States - are trying to nail down a deal to curb Iran's nuclear ambitions by reducing its stockpiles of enriched uranium and mothballing some of its sites.

If the agreement is reached and implemented, the powers have agreed to gradually scale back sanctions imposed since 2012, including on its petroleum industry.

Iran has the world's fourth-largest oil reserves but its exports have fallen from more than 2.2 million barrels per day in 2011 to about 1.3 million because of the sanctions.

AFP