Oil Prices Fall as Greek and Iran Deal Deadlines Loom

LONDON—Oil prices fell on Friday on continuing concerns about oversupply as investors keep an eye on Greek bailout talks and the looming deadline for Iran's nuclear deal.

After staging a 40% rally in the spring on expectations of strong demand and production cuts, price movements have been confined to a narrow band in the past two months because the global glut of oil shows few signs of abating.

"The market appears to have been set on cruise control, but the road remains rife with hazards," said analysts at Barclays. "Prices face downward pressure for the remainder of the year on resilient oil supplies."

Brent crude for August delivery fell 0.3% to $63 a barrel on London's ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate futures for July were trading down 0.4% at $59.43 a barrel.

According to Michael Poulsen, oil analyst at Global Risk Management, "this weekend and early next week will be highly dominated by both the Greek debt issue and Iranian nuclear deal, both with deadlines on 30 June."

The uncertainty of the outcome of either of the deals is weighing on oil prices at present and markets are looking for direction, he added.

"Expect volatility on any news from the negotiations in the coming days," Mr. Poulsen said.

European finance ministers have pushed talks over a Greek bailout deal to this weekend, after failing to reach an agreement this week. Failure to clinch a deal could put Greece on the road to bankruptcy and exit from the common currency area, which could roil financial markets. A Greek default could also hurt European oil demand, analysts said.

Meanwhile, in Iran, Supreme Leader Ayatollah Ali Khamenei has taken a harder line over his country's nuclear program this week, putting at risk negotiations for a final agreement ahead of the June 30 deadline. A final agreement to curb Iran's nuclear program next week is expected to pave the way for the lifting of Western sanctions and allowing of additional Iranian crude to be exported to global markets, which would pressure oil prices further.

The latest U.S. oil drilling rig count—a proxy for activity in the industry—will be released later on Friday by Baker Hughes Inc. The number of rigs has fallen sharply since oil prices headed south last year. There are now about 61% fewer rigs working since a peak of 1,609 in October.

The rate of decline, however, has slowed in recent weeks and some shale oil companies say they could add rigs in the coming months if prices stabilize near the current levels.

Nymex reformulated gasoline blendstock for July—the benchmark gasoline contract—rose 0.1% to $2.0374 a gallon, while ICE gasoil for July changed hands at $572 a metric ton, up $1.75 from Thursday's settlement.

Eric Yep contributed to this article

Write to Georgi Kantchev at [e-mail]

Access Investor Kit for Dominion Resources, Inc.

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=US25746U1097

Subscribe to WSJ: http://online.wsj.com?mod=djnwires