Oil prices tumbled their most in three months on Monday, with U.S. crude falling nearly 8 percent, after Greece's rejection of debt bailout terms and China's rolling out of emergency measures to support its stock markets shook global markets.
Adding to the pressure on oil markets, Iran and global powers were trying to meet a July 7 deadline on a nuclear deal, which could add more oil to oversupplied markets if sanctions on Iran are eased. The self-imposed deadline could be extended again, officials at the negotiations said.
U.S. crude has fallen 10 percent in all over three straight sessions and Brent over 7 percent in two consecutive days, the biggest rout since January. The slump brought oil out of its narrow trading band of the past three months, risking a deeper slide ahead.
"Even without Greece, China's stock market woes and Iran priming to hit the market with more barrels, the demand picture in oil has only been okay while the supply picture has been phenomenal," said John Kilduff, partner at New York energy hedge fund Again Capital.
"With these number of bearish elements weighing on the market now, the only thing of support has been the seasonal demand in gasoline, and even that will be going away soon."