Investing.com -- Crude futures extended losses from Monday's massive sell-off amid a stronger dollar, as western powers extended a deadline for a nuclear deal with Iran and optimism for a breakthrough in Greek Debt negotiations faded.
On the New York Mercantile Exchange, WTI crude for August delivery fell to an intraday low of $50.60, its lowest level since April 6, before rebounding slightly to close at $52.38 a barrel. For the session, Texas Long Sweet futures dipped 0.62 or 1.18%. On Monday, WTI crude futures dropped more than 5% while suffering one of its worst sessions of the year.
On the Intercontinental Exchange (ICE), brent crude for August delivery dipped to a session low of 55.10, its lowest level since late-March, before rallying to settle at $56.92 a barrel. During Tuesday's session, brent crude futures fell 0.23 or 0.41% to extend a three-day losing streak. Brent crude also plunged on Monday, dropping by more than 6.25%.
Meanwhile, the spread between the international and U.S. benchmarks of crude stood at $4.54, above Monday's level of 4.01.
In Vienna, talks between Iran and its Western negotiating partners continued after the sides failed to reach a deal on a final agreement by Tuesday's deadline. The stalemate dragged on, even as the U.S. State Department insisted that the two sides had achieved significant progress in the longstanding negotiations over the last 24 hours. The sides set a new deadline for Friday.
A nuclear deal is viewed as bearish for crude, as Iran reportedly hoards 30 million barrels of crude in its reserves ready for export. An outflow of Iranian oil could depress crude prices in a global market already oversaturated by a glut of oversupply. It is widely believed that Iran will ramp up exports if a plethora of severe economic sanctions are lifted by western powers.
The dollar, meanwhile, surged by more than 0.7% amid a wave of strong economic data and a lack of progress in high-level talks between Greece and its European creditors. Greek officials arrived at a summit in Brussels without a revised proposal for a deal that could unlock critical aid from its creditors, infuriating leaders from the euro zone of finance ministers and European Commission.
The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, soared to 97.45 its highest level in more than a month. Dollar-denominated commodities such as crude become more expensive for foreign purchasers when the dollar appreciates.
Investors awaited the American Petroleum Institute's weekly report on U.S. crude stockpiles after the bell for further indications on the supply glut in the energy markets. Separately, Wednesday's report from the Energy Information Administration could show that U.S. crude inventories fell by 0.5 barrels for the week ending on July 3. Last week, the EIA said U.S. stockpiles rose by 2.4 million barrels for the week ending on June 26, halting an eight week streak of weekly draws.
A sell-off in Chinese equities and the reopening of a key oil terminal in Libya also weighed, as crude futures experienced its worst two-day performance in more than four years.