BNN News: Oil falls more than 3 percent after Greek ‘No

A more near-term negative for crude, however, could be the slowdown in USA gasoline demand, expected to be peaking this week with Fourth of July holiday driving.

Markets are in for some real battering.

Then some key trends reversed: USA supplies increased for the first time in two months and the number of rigs drilling for oil in the USA grew for the first time since December.

Production in Russian Federation and the Organization of the Petroleum Exporting Countries is also set to begin. “We may have tipped the balance in the market”.

On Tuesday, light, sweet crude futures on the New York Mercantile Exchange for delivery in August traded at $52.92 a barrel at 0352 GMT, up $0.39 in the Globex electronic session.

But the real question is how low can crude futures go?

Brent front-month contracts for August cooled $3.78 settling at $56.54 per barrel. West Texas Intermediate plunged 7.7 percent, the most since February 4. Blanch said the 30 million to 40 million barrels Iran now has in floating storage could be on the market fairly quickly.

Add that fact to that Iranian nuke talks were pushed back and Greece inspired economic turmoi, l it is fantastic that oil is holding up as well as it is. The bet was that production would follow or at least hold steady, which hasn’t happened. It has affected the supply as well as demand fundamentals of crude oil. If the dollar appreciates, that will push down oil – since oil is priced in dollars.

“I think oil markets understand very well, depending on what gets decided one way or the other, it’s going to be months”, said Wittner. “There’s a whole gambit” of bad news for oil Monday. The low in this week’s price cycle was likely to be 2-3c lower than it would have been otherwise, thanks to the lower Singapore petrol prices, at about $1.28, NRMA spokesman Peter Khoury said.

“From a market point of view, both alternatives carry risks”, he said in a market commentary.

Dr Fesharaki put the chances of a $US10-$US20 a barrel slide in oil prices at about 50 per cent, with prices potentially recovering into the $US60s range by the end of 2015.

China, the world’s top consumer of energy and metals, suspended initial public offerings and brokerages pledged to buy shares in measures aimed at halting the steepest three-week stock plunge since 1992. The turmoil in Chinese stocks is another sign of the wrenching economic transformation that is under way in the Asian giant. In Vienna, a dispute over United Nations sanctions on Iran’s ballistic missile programme and a broader arms embargo were among issues holding up a nuclear deal between Tehran and six world powers.

Greeks voted a resounding no to a referendum on an global bailout that also raised concerns it would leave the European Union and the euro. “The CSI 300 index, 300 of the largest listed companies in Shanghai and Shenzhen closed up 2.9%, while the Shanghai Composite Index, SSEC gained 2.4%”. “The oil market is a little twitchy,”.