Oil Prices Drop on Greek, Iran Concerns
West Texas Intermediate, the U.S. benchmark, fell more than 1.5 percent from the previous close to $58.67 per barrel. Brent crude oil prices were down 1.6 percent early Monday to $62.21. WTI was around $60 and Brent was $65 per barrel June 1.
Crude oil prices are about 40 percent higher than at the start of 2015 as general improvements in the global economy take up some of the oversupply that prompted last year’s steep decline in energy markets. Though recovery is emerging, it’s been slow with Greece again dragging on prospects for the European economy.
With a deadline looming to stave off a default, the Bank of Greece said Monday it would only honor transactions from the government, legal persons and social security funds through July 6.
“No other transaction with the public will be carried out,” it said.
The European Central Bank during the weekend decided against extending emergency support to Greek banks. Greece by Tuesday owes the International Monetary Fund around $1.8 billion.
Jean-Claude Juncker, the head of the European Commission, said “egotism” on the part of Greece led to the collapse.
Elsewhere, a Tuesday deadline looms over talks between Iran and world powers over the status of its nuclear research program, which opponents see as geared toward a weapon. Iran could see sanctions pressure ease considerably if a deal is reached and, with it, more of its oil on the international market.
“We have to work through some difficult issues,” U.S. Secretary of State John Kerrysaid.
Analysis from Wood Mackenzie finds the gradual release of Iranian crude “is not expected to have a significant downward effect on oil prices.”
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