(MENAFN- FxPro) Oil prices were sharply lower on Wednesday after Greece defaulted on a loan repayment to the International Monetary Fund and following bearish overnight supply data.
On the New York Mercantile Exchange, crude oil for August delivery was last at $58.77 a barrel, down 1.17% for the day.
Brent crude for August delivery, the global benchmark was down 0.69% to $63.15.
Market sentiment was hit as Greece became the first developed country to default on the IMF as its bailout program expired.
The IMF confirmed that the Greek government failed to make a scheduled ‚¬1.6 billion loan repayment by close of business on Tuesday. The fund said
Greece can now only receive further funding after its arrears are cleared.
Data showing an unexpected build in U.S. oil stockpiles and soft Chinese manufacturing activity also weighed on prices.
Earlier Wednesday data from China indicated that activity in the manufacturing sector remained sluggish in June but service sector activity showed a slight uptick.
The HSBC China manufacturing purchasing managers' index rose to a final reading of 49.4 in June from 49.2 in May. A reading below 50 indicates a contraction.
The data came after the American Petroleum Institute reported Tuesday that U.S. oil stockpiles unexpectedly rose by 1.9 million barrels last week.
The U.S. Energy Information Department was to release its weekly report later in the trading day. The consensus forecast was for oil inventories to have decreased 2 million barrels in the week ended June 26.
In its monthly supply report released on Tuesday the EIA said U.S. crude production rose by 9,000 barrels a day to 9.7 million barrels a day in April, the highest level since May 1971.
Global oil production is still outstripping demand following a boom in U.S. shale oil production and after OPEC's decision last year not to cut production.
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