Investing.com - Oil futures fell to the lowest level in almost three months on Monday, as appetite for risker assets weakened after Greek voters rejected conditions of a rescue package from creditors on Sunday.
The result of the referendum has added to doubts over Greece’s future in the euro zone and deepened a standoff with its lenders.
On the ICE Futures Exchange in London, Brent oil for August delivery hit an intraday low of $59.38 a barrel, a level not seen since April 15, before trading at $59.67 during European morning hours, down 65 cents, or 1.07%.
Elsewhere, on the New York Mercantile Exchange, crude oil for August delivery lost 47 cents, or 0.84%, to trade at $55.05 a barrel after touching a daily low of $54.55, the weakest level since April 15.
Meanwhile, the spread between the Brent and the WTI crude contracts stood at $4.62 a barrel, compared to $3.39 by close of trade on Thursday.
European stock markets sank on Monday and the yields on Italian, Spanish and Portuguese bonds spiked after the "No" camp's strong victory on Sunday sparked concerns over a potential Greek banking collapse that could force the country out of the euro zone.
Greek Prime Minister Alexis Tsipras welcomed the outcome of the vote and said Athens was returning to negotiations with the express goal of reopening banks, which have been shut for over a week after capital controls were imposed.
Without more emergency funding from the European Central Bank, Greece's banks are facing a cash crunch within days. The ECB was to discuss whether to maintain emergency funding for Greek banks at their current restricted level later Monday.
In a surprise move, Greek Finance Minister Yanis Varoufakis resigned on Monday, despite the referendum results. In a statement, Varoufakis said his decision was prompted in part by “some European participants” expressing a desire for his part in any further negotiations to end.
German Chancellor Angela Merkel and French President Francois Hollande were set to meet in Paris on Monday afternoon, while Euro zone leaders were expected to hold a conference on Tuesday night to discuss the aftermath of the Greek referendum.
European officials have indicated that they will only continue to finance Greece in return for far-reaching economic reforms.
Oil futures plunged last week after Baker Hughes (NYSE:BHI) reported that the number of U.S. oil-drilling rigs rose by 12 to 640 last week, snapping 29 straight weeks of declines.
The report came after data on Wednesday showing an unexpected increase in U.S. oil stockpiles in the previous week, on the back of increased production.
Investors were also eyeing nuclear talks between the West and Iran, which could push millions of barrels of crude into the oversupplied world market.
Global oil production is outpacing demand following a boom in U.S. shale oil production and after a decision by the Organization of Petroleum Exporting Countries last year not to cut production.