US oil settles down 84 cents, or 1.39%, at $59.61 a barrel

A gas flare is seen at an oil well site outside Williston, North Dakota.
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A gas flare is seen at an oil well site outside Williston, North Dakota.

Crude oil fell more than 1 percent on Friday, the first decline after three days of gains, as worries over the Greek fiscal crisis, weaker oil products prices and pre-weekend profit taking undercut the market.

Gasoline and diesel's proxy, heating oil, led the oil complex lower, sliding about 3 percent as concerns about their high refining margins over crude prompted those who had been bullish on such products to close out some positions.

U.S. crude for July closed down 84 cents, or 1.39 percent, at $59.61 a barrel. Brent crude for August slipped $1.20 to $63 a barrel.

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Oil prices were little changed after oilfield services firm Baker Hughes reported its weekly rig count fell again last week, extending the decline in exploration to a seventh month.

The number of rigs exploring for oil in the United States fell by 4 last week to a total of 631. This time last year, U.S. drillers had 1,545 oil rigs online.

For the week, Brent was nearly 2 percent lower, while U.S. crude slipped about 1 percent.

Traders pinned the decline mostly to fears about Greece as it teetered on the edge of default.

Euro zone leaders will hold an emergency summit on Monday to try and throw a lifeline to Athens. While the crisis has affected equity and treasury markets more than oil, the dollar's resultant rise has made commodities denominated in the greenback costlier for users of currencies like the euro.

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"Oil markets are not pricing much in terms of Greek risk but most of the European oil demand growth this year is coming from the southern countries," said Olivier Jakob of Petromatrix in Zug, Switzerland.

"Therefore, if there was a Greek default and a contagion of a risk premium to other southern European countries, it could have a negative impact on European oil demand."

Oil up more than 3% for month
Oil up more than 3% for month   

Profit-taking in oil products also weighed on crude, said Donald Morton, who runs an energy-trading desk at Herbert J. Sims & Co in Fairfield, Connecticut.

"The gasoline crack is still very high," Morton said, referring to the profit margin refiners obtain for "cracking" the motor fuel out of crude.

"There is still a large speculator position in my opinion in gasoline."

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The gasoline crack stood at $27 a barrel on Friday, off from Wednesday's 3-month high above $30. For heating oil, or diesel, the crack was above $19, a level broadly sustained since the end of May.

Demand for gasoline and other motor fuels has been strong across the northern hemisphere due to a peak in driving expected during the summer. But some market players doubt the strength of motor fuel alone could keep oil prices at highs.

"Logic calls for real and significant downside price risk for Brent."