By Eric Yep
Crude-oil futures slumped in Asian trade Monday in line with a
fall in wider commodities markets after Greece voted to reject the
terms of its current bailout agreement in a weekend referendum.
After being stuck in a narrow price range for several weeks, oil
has slipped into bearish territory on the back of developments in
Greece, a stronger greenback, the Iranian nuclear talks and strong
U.S. oil supply.
On the New York Mercantile Exchange, light, sweet crude futures
for delivery in August traded at $54.96 a barrel at 0332 GMT, down
$1.97 in the Globex electronic session. August Brent crude on
London's ICE Futures exchange fell $0.58 to $59.74 a barrel.
Nymex crude lost 4.5% last week, its largest one-week net and
percentage decline since mid-March, and has been down for three
consecutive weeks. U.S. markets were closed on Friday. Brent crude
lost 4.7% last week and has been down two of the past three
weeks.
Over the weekend, Greek voters rejected creditors' demands in a
referendum, raising concerns about its exit from the eurozone and
sending financial markets into a tailspin on Monday.
"This is causing extreme bearishness in the market as prices
remain low, breaking several supports which we had believed to be
strong," Daniel Ang, an analyst at Singapore-based Phillip Futures,
said. He said the unexpected increase in U.S. crude inventories
last week is also widening the Brent-WTI spread, which is trading
at $4.80 a barrel.
Oil markets are also wary of negotiations over Iran's nuclear
program expected to conclude by Tuesday, as further delays would
make it tougher for the Obama administration to finalize the
deal.
Key elements of the deal between Iran and six world powers were
falling into place Sunday, but U.S. Secretary of State John Kerry
warned there were important sticking points that may yet scuttle
the deal.
Iran expects to double its crude exports to 2.3 million barrels
a day soon after sanctions are lifted and is pushing other members
of the Organization of the Petroleum Exporting Countries to renew
the cartel's quota system, Iran's deputy oil minister for planning
and supervision, Mansour Moazami, said.
The return of Iranian oil to the market will be delayed and
gradual, and not significant until well into 2016, Michael Wittner,
head of oil research at Societe Generale said. "At that point, the
market will be able to absorb Iranian volumes," he maintained.
Meanwhile, Saudi Arabia lowered the official selling price for
its benchmark Arab Light crude to Asia in August, but raised the
price for its customers in Europe.
Nymex reformulated gasoline blendstock for August--the benchmark
gasoline contract--fell 409 points to $1.9934 a gallon, while
August diesel traded at $1.7891, 508 points lower.
ICE gasoil for July changed hands at $551.00 a metric ton, down
$4.00 from Friday's settlement.
--BenoƮt Faucon, Summer Said and Laurence Norman contributed to
this article.
Write to Eric Yep at eric.yep@wsj.com