Oil Prices Retreat on Greece Crisis

Oil Prices Retreat on Greece Crisis Oil Prices Retreat on Greece Crisis

Oil dropped to a three-week low amid concern that Greece’s failure to reach a deal with international creditors will prompt its exit from the euro area. The euro fell against the dollar as the Greek government imposed capital controls and shut banks.

Oil is heading for its first monthly decline in New York since March as the Greek crisis deepens. Crude’s 11% advance this year has also encouraged US producers and OPEC’s biggest members to pump at a record pace, signaling a global glut may persist, Bloomberg reported.

“Today’s move is all about the Greek situation,” said John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy. “Investors are trying to sort it all out and react accordingly. We’re going to see episodes of intense selling until there’s a resolution.”

West Texas Intermediate for August delivery fell $1.04, or 1.7%, to $58.59 a barrel on the New York Mercantile Exchange. Futures touched $58.04, the lowest since June 8. Prices have dropped 2.8% this month.

Brent for August settlement decreased $1.29, or 2%, to $61.97 a barrel on the London-based ICE Futures Europe exchange. Futures reached $61.35, the least since June 5.

Prices are down 5.5% in June. The European benchmark grade traded at a $3.38 premium to WTI.

Elsewhere, dealers are waiting to see if Iran and world powers can reach a final deal on Tehran’s nuclear program by a self-imposed June 30 deadline. Such a move would pave the way for more Iranian crude to hit the already oversupplied international market.