Oil Tumbles 5 pct after Greek "No" Vote (Update)

Greek 'No' to bailout terms hits global financial markets; China imposes emergency measures to support stock markets.

Oil prices tumbled their most  in three months on Monday, with U.S. crude falling 5 percent, after Greece's rejection of debt bailout terms and China's rolling out of emergency measures to support its stock markets shook global markets.

Adding to the pressure on oil markets, Iran and global powers were trying to meet a July 7 deadline on a nuclear deal, which could add more oil to oversupplied markets if sanctions on Iran are eased. The self-imposed deadline could be extended again, officials at the negotiations said.

U.S. crude was down $2.61 at $54.32 a barrel by 10:45 a.m. EDT (1445 GMT), breaking below the 100-day moving average and heading for its worst loss in a day since the near 7 percent drop on April 8.

"What happens now depends on the bears' ability to break down $54 which is a major level of support," said Fawad Razaqzada, a London-based technical analyst for forex.com. "A closing break below $54 could pave the way for a move down to $50."

Brent fell $1.60, or 2.7 percent, to $58.72, also snapping the 100-day average.

Greeks voted a resounding no to a referendum on an international bailout that also put in doubt its membership in the euro. The euro fell against the dollar, weighing on demand for dollar-denominated commodities from holders of the single currency.

"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.

Commodities were also sucked into market turmoil that has  seen Chinese shares fall as much as 30 percent since June due in part to the economy growing at its slowest pace in a generation.

In Vienna, a dispute over U.N. sanctions on Iran's ballistic missile programme and a broader arms embargo were among issues holding up a nuclear deal between Tehran and six world powers.

Iran is seeking to restore oil exports that have dropped from 2.5 million barrels per day in 2011 to about 1 million bpd in 2014.

By Barani Krishnan