Oil Down on Eurozone, U.S. Fears

Oil fell sharply on Monday because of continuing fears over Greece's debt crisis and concerns over the U.S. economy, analysts said.

New York's main contract, West Texas Intermediate (WTI) light sweet crude for July delivery, dropped $1.35 to $91.66 a barrel.

Brent North Sea crude for August shed $1.44 to $111.77 a barrel in London morning deals.

"Oil prices continue to be worn down by pressures concerning the Greek debt crisis, which is affecting markets globally," said Victor Shum, an analyst with Purvin and Gertz international energy consultancy in Singapore.

European finance chiefs on Sunday launched crunch talks to avert the default of debt-stricken Greece amid fears of a domino effect across the Eurozone.

The finance ministers said they and the International Monetary Fund (IMF) would release 12 billion Euros ($18 billion) of loans in "mid-July" on condition that Greece introduces tough budget cuts and asset sales.

Markets are worried that a default on Greek debt could trigger a cascade of problems in Europe's bigger economies and spark another global financial crisis.

"Another primary concern is over the U.S. economic outlook," Shum added.

The IMF has joined calls for the U.S. Congress to raise the country's debt limit; warning failure to act could provoke a major global market upheaval.

The U.S. government hit its legal borrowing limit of $14.29 trillion on May 16, forcing the Treasury to take extraordinary technical measures to avert a debt default. That room for maneuver is expected to run out on August 2.

The issue of raising the debt limit is bogged down in Congress, where President Barack Obama's Democrats are at loggerheads with Republicans, who control the House of Representatives.