Oil prices slumped today, falling to a six-month low under $90 in New York as the dollar rallied on euro zone debt tensions, traders said.

New York's main contract, West Texas Intermediate crude for delivery in July, slid $1.89 to $89.96 a barrel - the lowest level since the start of November.

Brent North Sea crude for July tumbled $2.67 to $105.74 a barrel in late London deals.

"Crude prices plunged today as the US dollar soared," said David Morrison, senior strategist at trading group GFT Markets.

A stronger US currency makes dollar-denominated oil more expensive for buyers using the European single currency - denting demand for crude.

"Investors sought out the relative safety of the greenback as fears grew over the outlook for the euro zone."

The euro dived to a 22-month low under $1.26, as investors shunned risky assets before an informal EU summit and after the former Greek premier warned that Athens might leave the euro zone.

Oil prices also dropped on easing tensions over the nuclear ambitions of major crude producer Iran, traders said.

World powers pressing Iran to scale back its nuclear programme today offered a new batch of incentives that however fell short of the sanctions relief sought by Tehran.

Reports said they included a revival of previous attempts at a deal whereby Iran would ship abroad its stockpiles of enriched uranium in return for fuel for a reactor producing medical isotopes.

Other incentives were reportedly easing Iranian access to aircraft parts and a possible suspension of an EU insurance ban on ships carrying Iranian oil.

But beyond a pledge not to impose any more, the package made no mention of easing the barrage of sanctions that have been piled - with more to come into effect in July - on Iran over suspicions the country wants nuclear weapons.

In return, the P5+1 want Iran to suspend 20-percent enrichment, which they see as the most worrying part of Tehran's activities since the capability reduces the theoretical "breakout" time needed to get the bomb.

Progress over Iran "could result in US-led sanctions on Iranian oil imports being eased," Morrison added.