Crude prices up modestly on bets for Greek deal, eyes on Iran

NEW YORK (Reuters) - Crude futures rose modestly Friday on hopes for a deal that would help Greece avoid a debt default, and on uncertainty over whether a nuclear deal could be sealed with Iran next week that may end crippling sanctions on its oil exports.

A suicide bombing by Islamic State militants in Kuwait, which killed 25 people and wounded more than 200, raised fears about the security of Middle East oil supplies, lending some support to crude.

Other acts of violence with varying impact on the market included a terror attack in France, the shooting deaths of 28 people in Tunisia, including Western tourists; and the killing of at least 145 civilians in northern Syria by Islamic State militants.

Greece's Finance Minister Yanis Varoufakis said he saw no reason for Athens not to have a deal with its creditors by Saturday as Athens worked toward an agreement that would help it avoid a debt default and stay in the euro zone.

A senior EU official, however, said Greece will probably be in arrears with the IMF for a few days.

"If there is a resolution to the Greece problems, this market could get a big boost," said Phil Flynn, analyst at the Price Futures Group in Chicago.

Brent futures were up 10 cents at $63.30 a barrel by 1:58 p.m. EDT.

U.S. crude rose 5 cents to $59.75.

In refined oil products, gasoline rose 0.7 percent while ultra-low sulfur diesel gained 0.3 percent on short-covering after sharp losses in recent sessions.

In Vienna, major differences remained at talks between Iran and world powers on key issues such as sanctions relief and U.N. access to Iranian nuclear sites ahead of a June 30 deadline for a final deal, senior Western diplomat said.

On the data front, oil services firm Baker Hughes said the U.S. oil rig count, a measure of future production, fell by 3 this week.

It was the smallest drop in five weeks and a sign that the collapse in U.S. drilling was coming to an end, with crude prices recovering after a 60 percent slump between last June and March this year.

"We're bottoming out and should see an end to this drop in the coming weeks," Matt Smith, director of commodity research at New York-based Clipper Data said, referring to the rig count.

(Additional reporting by Claire Milhench in London and Keith Wallis in Singapore; Editing by Marguerita Choy and Bernadette Baum)