SINGAPORE: Oil prices fell in Asia on Monday, tracking the sell-off in global equity markets on fears of a Greek debt default, analysts said.
US benchmark West Texas Intermediate for August delivery fell 90 cents to $58.73, while Brent crude for August eased 82 cents to $62.44 in afternoon trade.
Asian equity markets and the euro were facing sell-offs at the start of the week after cash-strapped Greece broke off deadlocked talks with creditors over the weekend, despite a June 30 due date for a massive repayment to the International Monetary Fund.
Greek Prime Minister Alexis Tsipras called a surprise July 5 referendum on the creditors’ latest bailout proposal, and on Sunday shut banks until July 6 and imposed capital controls throughout the country to avoid capital flight.
The EU and IMF responded by rejecting a request to extend Greece’s bailout beyond the June 30 deadline, meaning it will default on a key payment and possibly crash out of the eurozone.
“With the Greek government’s decision to pursue a referendum set for July 5, risk aversion has returned and is likely to persist this week,” Singapore’s United Overseas Bank said in a commentary.
Daniel Ang, investment analyst at Phillip Futures in Singapore, said the weakening euro “could see crude prices continue to drop, similar to what we have seen at market open.”