Oil prices sink nearly 8% on Greece, China fears

New York - US oil prices sank nearly 8% on Monday on worries about slowing global growth after Greek voters rejected a bailout offer and China moved to calm financial market turbulence.

US benchmark West Texas Intermediate for delivery in August fell $4.43, closing at $52.53 a barrel on the New York Mercantile Exchange.

European benchmark Brent oil for delivery in August dropped $3.78 to $56.54 a barrel in London.

"With the crisis in Greece, with the Chinese market unstable, the demand we once saw for global oil is eroding quickly," said Carl Larry, a consultant for Frost & Sullivan in Houston.

Analysts cited fears about Europe after Greece voted decisively against further austerity measures imposed by creditors, throwing its position in the currency bloc into doubt.

The Greece crisis has also boosted the dollar, raising the cost of crude for those using other currencies.

Volatility in China's equities markets spurred Beijing to step into support them, but served to underscore weaknesses in the Chinese economy that could impact energy consumption there.

Bart Melek, head of commodity strategy at TD Securities, said on top of the doubts about petroleum demand, "we have huge supply issues" with Opec pumping "hugely" above quota.

Two members of the Organisation of Petroleum Exporting Countries, Saudi Arabia and Iraq, together pumped about 900 000 barrels per day more in May 2015 than they did a year ago, said Matt Smith, analyst at ClipperData.

Adding to current lofty production levels is the looming chance for a deal between nuclear negotiators from Iran and global powers that could result in the lifting of sanctions on Iran, opening the way for greater crude exports.

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