Oil prices recover as Iran talks, Greek crisis drag on

Oil prices recovered today after the Iran nuclear talks were extended until July 7, giving oversupplied markets a breather despite uncertainty over the Greek financial crisis, analysts said.

US benchmark West Texas Intermediate (WTI) for August delivery was up 10 cents at $57.06 in late morning Asian trade while Brent was 23 cents higher at $62.24.

"With the deadline now extended into next week on finding a comprehensive agreement on Tehran's nuclear programme, the markets will monitor closely the outcome of the negotiations as Iran sits on the fourth-largest oil reserves and second-largest gas reserves in the world," said Sanjeev Gupta, head of the Asia-Pacific Oil and Gas practice at Ernst and Young.

Daniel Ang, investment analyst at Phillip Futures, said "we continue to focus on the timing that Iranian crude would flow into the market for this situation".

Oil futures prices fell yesterday after the Department of Energy reported an unexpected increase in US stockpiles last week, further dampening sentiment.

"With prices falling yesterday, we are seeing that the high volatilities that we were aiming for could be over. We suggest taking profit on this position," said analyst Ang.

Talks between Iran and major powers towards a nuclear deal will intensify today with the head of the UN atomic watchdog due in Tehran, seeking to resolve an impasse over inspecting suspect military sites.

Traders are closely tracking developments in Europe ahead of Sunday's crucial referendum on Greece on whether to accept creditors' bailout reform proposals, with European leaders casting it as a simple in/out vote on Athens' eurozone future.