Crude oil prices extended sharp losses from the previous session on Monday, dropping to a four-month low as the U.S. dollar gained amid uncertainty over a second Greek bailout package, while concerns over a slowdown in demand from the U.S. also weighed.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in July traded at USD91.98 a barrel during European morning trade, tumbling 1.52%.
It earlier fell as much as 1.78% to USD91.52 a barrel, the lowest price since February 21.
The U.S. dollar advanced against the euro after Euro Group finance ministers postponed a decision on a second Greek rescue package until mid-July.
Luxembourg’s finance minister Jean-Claude Juncker said on Sunday that a new bailout package for Greece would be dependent on whether the Greek parliament managed to pass a new austerity package.
Greece’s parliament is expected to vote on the controversial new austerity package on Tuesday.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.55% to trade at 75.88.
Dollar-denominated oil futures contracts tend to fall when the dollar rises, as this makes oil more expensive for holders of other currencies.
Meanwhile, concerns over a slowdown in demand from the U.S., the world’s largest oil consumer, pressured prices.
The American Petroleum Institute said on Friday that U.S. crude supplies rose to 367.6 million barrels in May, the highest level in 31-years, as refineries processed less crude amid a decline in gasoline demand.
U.S. consumption of distillate fuel, which includes diesel and heating oil, fell 5.2% last week to the lowest since January, according to the U.S. Energy Department
Elsewhere, on the ICE Futures Exchange, Brent oil futures for August delivery fell 1.19% to trade at USD111.92 a barrel, up USD19.94 on its U.S. counterpart.
The spread between the two contracts rose to an all-time high of USD23.34 last week. The two contracts historically have traded within USD1.00 of each other.
Barclays on Friday attributed the widening spread between the two contacts to “an oversupplied U.S. market”.
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