Oil prices dip on oversupply, worries over Greece

Greece's payment to the IMF a day before deadline was not enough to stop worries over future payments, said officials

Oil prices eased on Tuesday as the market remained oversupplied and the dollar gained on fears that Greece would not be able to repay its debts.

Greece paid about 750 million euros ($836.70 million) to the International Monetary Fund late on Monday, a day before it was due, Greek finance ministry officials told Reuters, but it was not enough to stop worries over future payments.

"Just hours before the loan was due, Greece brought relief to the markets by ordering payment. But don't be too happy just yet," Singapore-based brokerage Phillip Futures warned.

"The four-month extension of Greece's bailout plan, agreed in February, expires next month. This means for the rest of May, Greece will be locked into debating another extension of its bailout plan."

The brokerage said it expected prices to fall further on Tuesday, especially if the Organization of the Petroleum Exporting Countries' (OPEC's) monthly report due to be released later on Tuesday showed a rise in production.

"Fundamentals for oil are pretty stable and weak," said

Shunling Yap, a senior oil analyst at BMI Research, pointing to ample crude supply and slowing growth in China.

June Brent crude was down 8 cents to $64.83 a barrel by 0321 GMT. June West Texas Intermediate (WTI) dropped 2 cents to $59.23 a barrel.

The most recent price falls came after Brent climbed 40% from its January lows, with many analysts saying upwards momentum looks to have come to an end as production around the world continues to outpace demand.

"Any increases in prices would see an automatic response from the market especially from the lower cost producers such as those in the (US) Permian Basin," Yap said.