Crude oil futures fall more than $1 as Grexit fears mount

Investing.com - Crude oil futures sold off on Monday, after emergency bailout talks between Greece and its international creditors broke down over the weekend, pushing Athens to the brink of a debt default and possible euro zone exit.

On the ICE Futures Exchange in London, Brent oil for August delivery hit a session low of $61.36 a barrel, the weakest level since May 28, before trading at $61.85 during U.S. morning hours, down $1.42, or 2.25%.

Elsewhere, on the New York Mercantile Exchange, crude oil for August delivery lost $1.25, or 2.1%, to trade at $58.38 a barrel after touching a daily low of $58.05, a level not seen since June 5.

Meanwhile, the spread between the Brent and the WTI crude contracts stood at $3.47 a barrel, compared to $3.63 by close of trade on Friday.

Greece’s bailout is due to expire on Tuesday, the same day that Athens is due to repay €1.6 billion to the IMF, but without a rescue package in place Greece will almost certainly default.

Greek Prime Minister Alexis Tsipras abandoned negotiations with creditors on Saturday and called for a referendum to be held on July 5 on the terms proposed by lenders for extending the country’s bailout.

A yes vote will mean that Greeks are willing accept the latest reforms offered by creditors to Athens, while a rejection will likely lead to Greece\'s exit from the single currency union.

A Greek official said Monday that banks would remain closed for six days starting on Monday to avert a crisis in the banking sector after deposit outflows accelerated over the weekend. Withdrawals at ATM machines were to be limited to €60 a day per account.

European stock markets sank on Monday and the yields on Italian, Spanish and Portuguese bonds spiked amid mounting fears that Greece would become the first country to exit the euro zone.

Meanwhile, oil traders awaited the outcome of talks between Iran and world powers over Tehran\'s nuclear program later this week, which could result in a flood of Iranian crude returning to the market which is already oversupplied.

A final nuclear agreement between Western powers and Iran over the country’s nuclear program is due June 30, but officials already acknowledged that talks will likely extend beyond the deadline.