Oil prices have fallen following a rejection of the terms of an international bailout by Greece and stock market turmoil in China.

Benchmark Brent crude oil dipped $1.42 a barrel to a low of $58.90, while the US light crude fell as low as $54.34, Reuters reported.

The referendum is expected to pull Greece out of the eurozone, resulting in strengthening of dollar against euro.

Prices also dipped as China launched emergency measures to prevent stock market crash, which added to worries about weak demand growth.

"Uncertainty over Greece is bearish for oil."

In an effort to back markets, brokerages and fund managers in China have agreed to buy bulk amounts of stocks.

Petromatrix Switzerland senior energy analyst Olivier Jakob told the news agency: "Uncertainty over Greece is bearish for oil.

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"It adds an extra negative factor on top of the turmoil in Chinese financial markets, the recent rise in US drilling rigs, and a potential increase in Iranian oil supply."

Following 29 weeks of falls, drilling in the US increased for the first time.

Production in Russia and the Organization of the Petroleum Exporting Countries is also set to begin.

A possible nuclear deal between global powers and Iran is expected to clear ways for oil barrels from oil producing country to reach market, which could add further pressure on oil markets.