By Henning Gloystein
SINGAPORE (Reuters) - Oil prices fell sharply on Monday after Greece rejected bailout terms and as China rolled out emergency measures to prevent a full-blown stock market crash, adding to worries about poor demand growth amid global oversupply.
The result of the Greek referendum put in doubt its membership in the single currency, pulling down the euro on Monday against the dollar.
A strong greenback pressures oil markets as it makes dollar-traded fuel more expensive for holders of other currencies.
Asian commodities were sucked into market turmoil that has seen Chinese shares fall by as much as 30 percent since June due in part to an economy that is growing at its slowest pace in a generation, and which forced Beijing to roll out a salvo of support measures from over the weekend.
Chinese brokerages and fund managers agreed to buy massive amounts of stocks to support markets, helped by China's state-backed margin finance company which in turn would be aided by a direct line of liquidity from the central bank.
"Uncertainty over Greece is bearish for oil. It adds an extra negative factor on top of the turmoil in Chinese financial markets, the recent rise in U.S. drilling rigs, and a potential increase in Iranian oil supply," said Olivier Jakob, senior energy analyst at Petromatrix in Zug, Switzerland.
"The main implication is for euro/dollar and I think it will put additional pressure on the euro," he added.
International benchmark Brent futures were down over a percentage point at $59.63 per barrel at 0650 GMT, and U.S. crude futures were at $54.98 a barrel, down almost $2 since they last traded before the July 4 national holiday.
The falls meant that both crude futures were at their lowest levels since mid-April.
With markets already nervous due to the turmoil in Europe and China, fundamentals were also bearish.
U.S. drilling increased for the first time after 29 weeks of declines, the strongest sign yet that higher crude prices are coaxing producers back to the well pad.
Production in Russia and the Organization of the Petroleum Exporting Countries (OPEC) is also at or near records.
Putting further pressure on oil markets is a possible nuclear deal between global powers and Iran, which could add more oil to oversupplied markets if sanctions are eased.
"Reports increasingly suggest a deal is likely before July 9 ... Western officials also reiterated the deadline won't be extended again, and significant progress has been made recently," Morgan Stanley said on Monday.
(Additional reporting by Aaron Sheldrick in Tokyo and Dmitry Zhdannikov in London; Editing by Tom Hogue and Subhranshu Sahu)
