Oil hovers near lows as Greek banks stay closed for 2nd day

Source:Reuters Published: 2015-6-30 19:53:11

Oil futures hovered below three-week lows Tuesday as investors waited for developments in Greece following a bank shutdown, keeping them away from riskier assets and putting Brent crude on course for a second month of declines.

Brent crude futures were down $0.03 at $61.98 a barrel at 0624 GMT, after falling to $62.01 Monday, their weakest finish since June 5. The contract is heading for its second straight monthly decline and is down almost 5.5 percent in June.

US crude dropped $0.14 to $58.19, having closed down $1.30 at $58.33 a barrel, its lowest settlement since June 8. It is set for its first monthly decline in three and has fallen about 3.5 percent this month.

"Greece is still the word," said Ben Le Brun, market analyst at OptionsXpress in Sydney. "That story doesn't look like stopping anytime soon."

Tens of thousands of Greeks hit the streets Monday after waking up to shuttered banks, closed cash machines and a climate of rumors and conspiracy theories following the breakdown in talks between Athens and its creditors.

Any resolution to the crisis is unlikely before a referendum on Greece's bailout is held Sunday, after Prime Minister Alexis Tsipras announced the vote, wrong-footing European leaders and policy makers.

Investors are also looking at the US government's June payrolls report Thursday and the negotiations over Iran's disputed nuclear program in Vienna, Le Brun said.

The former may reinforce ideas that the US Federal Reserve could raise interest rates as early as September, the first such hike in about 10 years.

The Vienna talks would continue past Tuesday's deadline for a comprehensive agreement intended to open the door to ending sanctions in exchange for limits on Iran's most sensitive nuclear activities for at least a decade, a senior U.S. official said Tuesday.

In May, Asian imports of Iranian crude rose to the highest level this year at 1.2 million barrels per day, according to final figures released Tuesday.

Still, Greece is the overriding concern for investors in most commodities markets, Le Brun said.

"It will probably be very headline driven in the short term," he said.

Reuters

Posted in: Markets

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