Oil prices drop after Greece defaults on IMF payment

SINGAPORE, JULY 1 : Crude oil prices fell in early trading on Wednesday after Greece became the first developed economy to default on a loan with the International Monetary Fund.

Greece, as expected, was not able to repay 1.6 billion euros it owed to the IMF, in what was the largest missed payment in the Fund's history.

Greece's default pushed up the dollar versus the euro, with the stronger greenback pressuring crude prices as it increases dollar-denominated oil import prices for countries using different currencies.

Front-month Brent crude futures were trading at $63.15 per barrel at 0044 GMT, down 44 cents from their last settlement. U.S. crude futures were down 57 cents at $58.90 per barrel.

Analysts said a rise in Iraqi output was also weighing on prices.

"Iraqi crude production climbed to a record level this month, with OPEC crude oil output estimated to have reached 32.1 million barrels per day against a target of 30 million barrels per day," ANZ said in a morning note.

The extension of a deadline for a nuclear deal that will let Iran export more crude into an oversupplied market was also dragging on prices.

In the United States, crude stocks rose last week as imports climbed, while gasoline and distillate stocks also climbed, data from industry group the American Petroleum Institute showed.

Crude inventories rose by 1.9 million barrels in the week to 468.9 million, compared with analyst expectations for a decrease of 2.000 million barrels.

Crude stocks at the Cushing, Oklahoma, delivery hub fell by 19,000 barrels, API said.

Refinery crude runs rose by 77,000 barrels per day, API data showed.

Source : thehindubusinessline.com