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The
market also kept an eye on negotiations to try to avert a Greek
debt default and avoid Greece's exit from the euro.
A Greek default would be likely to strengthen the dollar against
the euro, providing headwinds for oil and other commodities
priced in dollars, economists say.
Brent crude for August was down 4 cents at $63.16 a barrel by
7.15 a.m. EDT after ending the previous session down 29 cents.
U.S. crude was down 19 cents at $59.51 a barrel after finishing
Thursday down 57 cents.
"We are well and truly stuck," said Ole Hansen, senior commodity
strategist at Saxo Bank.
The possibility that Iran may strike a deal with Western powers
to end economic sanctions has been capping gains in oil, as a
resumption of Iranian crude exports would exacerbate a global
over-supply. Negotiators face a June 30 deadline for a deal.
"If they spring a deal, that would be taken as a bit of a
surprise," said Hansen. "That would probably take the market
down 5-10 percent."
Barbara Lambrecht, energy analyst at Commerzbank in Frankfurt,
said the chances of an Iranian nuclear deal being concluded by
the deadline were not that high: "It looks like it will be
delayed."
A glut of unsold North Sea and West African barrels in the
Atlantic Basin is weighing on Brent, with the physical market
struggling to find homes for crude that loaded on to tankers
weeks ago.
North Sea Forties crude fell to its lowest level since the 2008
financial crisis on Thursday.
"There's a lot of crude oil that's trying to find a home ...
That limits the potential for a crude oil rally and puts
pressure on the price," said Olivier Jakob, managing director of
Petromatrix.
(Additional reporting by Keith Wallis in Singapore; Editing by
Christopher Johnson)
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