Oil fell toward $63 a barrel on Friday as concern over Greece and a forecast that U.S. shale oil output would keep growing this year countered signs of a pickup 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. Euro zone leaders will hold an emergency summit on Monday to try to avert a Greek default.
Brent crude LCOc1 for August had dropped $1.00 to $63.26 as of 9.45 a.m. EDT, while U.S. crude for July CLc1 was down 78 cents at $59.67. 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, state media reported on Thursday. U.S. crude stocks declined in the latest week.