Oil eased below $64 a barrel yesterday as concern over Greece and a forecast that US shale oil output would keep growing this year countered signs of a pick-up in demand.
Greece has been less of a driver for oil than other markets such as equities, but analysts said the situation represented a bearish risk heading into the weekend. Eurozone leaders will hold an emergency summit on Monday to try to avert a Greek default.
Brent crude for August had slipped 42 cents to $63.84, while US crude for July was down 44 cents at $60.01. Both contracts made gains on Thursday.
“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.”
Saudi Arabian oil minister Ali al-Naimi said he was optimistic about the market in coming months, given increased demand and falling inventories.
Despite stronger demand, supply is more than ample. There has been a build-up of North Sea and Nigerian crude cargoes, putting price differentials under pressure and sending them in some cases to multi-year lows.