NYMEX crude down in Asia as Greece debt talks at a standstill

Investing.com - Crude oil prices dropped in Asia on Monday with talks on a debt package for Greece at an apparent standstill.

Greece and representatives from the European Commission, the International Monetary Fund and the European Central Bank failed to reach agreement at a meeting at Brussels proposed by European Commission President Jean-Claude Juncker.

Greece was prepared to bridge the fiscal gap but creditors insisted on pension cuts and value-added-tax rises already rejected by the Greek government. There were also differences in calculation of the fiscal gap for 2016 and 2017, according to news reports.

"President Juncker made a last attempt this weekend to find via personal representatives and in close liaison with commission, ECB and IMF experts a solution with Prime Minister (Alexis) Tsipras that would allow for a positive assessment in time for the Eurogroup on Thursday June 18," a commission spokesman said.

"While some progress was made the talks did not succeed as there remains a significant gap between the plans of the Greek authorities and the joint requirements of the three institutions in order of 0.5%-to-1% of gross domestic product or the equivalent of up to E2 billion of permanent fiscal measures on an annual basis" the spokesman said.

"On this basis further discussions will now have to take place at the Eurogroup. President Juncker remains convinced that with stronger reform efforts on the Greek side and political will on all sides a solution can still be found at the end of the month," the spokesman said.

Crude for July delivery eased 0.32% at $60.20 a barrel on the New York Mercantile Exchange.

Last week, oil prices fell sharply on Friday as concerns about oversupply continued to weigh, but still ended the week higher, boosted by a weaker dollar.

Brent crude for July delivery, the global benchmark, was down 1.9%, to settle at $63.87 a barrel on the ICE Futures exchange. The contract rose 0.88% on the week.

Oil prices fell amid concerns that higher output by Saudi Arabia would feed into a global supply glut. Saudi Arabia said Wednesday it had raised output over the past three months in response to stronger global demand.

Concerns on supply overshadowed a report showing another fall in the latest U.S. oil drilling rig count. Baker Hughes (NYSE:NYSE:BHI) said Friday that there were seven fewer oil rigs working in the U.S. last week, pointing to further cutbacks in drilling and production.

Global oil production is outpacing demand following a boom in U.S. shale oil production and after OPEC's decision last year not to cut production.

Earlier this month OPEC decided to maintain its output quotas at 30 million barrels per day.

In its monthly report on Thursday the International Energy Agency said it expected world oil demand to increase faster than it previously forecast this year, buoyed by lower prices and economic growth.

The IEA said global demand for oil would increase by 1.4 million barrels a day this year, 300,000 barrels a day more than it previously forecast, to a daily average of 94 million barrels this year.

Global demand in 2014 was about 92.6 million barrels a day, the agency said.

In the week ahead, investors will also be looking ahead to Wednesday’s Federal Reserve rate statement for a clear signal on when it could start to raise interest rates.

Greece’s debt talks will also remain in focus with time running out to reach cash-for reforms deal before the end of the month.

On Monday, Switzerland is to release data on producer prices and retail sales.

European Central Bank President Mario Draghi is to testify before the European Parliament's Economic and Monetary Affairs Committee, in Brussels.

Canada is to publish a report on manufacturing sales.

The U.S. is to publish data on industrial production and manufacturing activity in the New York region.