Crude oil falls on US stockpiles report, Brexit fears

Reuters Updated - January 20, 2018 at 08:10 PM.

crude

Oil prices fell in early Asian trade on Thursday, heading for a sixth day of declines, following a lower-than-expected draw on US stockpiles and amid worries Britain might leave the European Union.

Front-month US crude futures were down 39 cents, or nearly 1 per cent, at $47.62 a barrel at 0142 GMT.

Brent crude was 34 cents, or 0.7 per cent, lower at $48.63 a barrel.

Oil prices have fallen everyday after June 8, losing about 8 per cent of their value.

Last week, Brent was at the highest this year, touching almost $53 a barrel, while US crude was near $52 after supply disruptions from producers including Nigeria and Canada.

“Oil looks likely to struggle in the face of concerns that the recent rally was too strong and too fast,” ANZ said in a note.

Crude stocks

US crude stocks fell last week, the government had said on Wednesday, but the decline was much smaller than anticipated, while gasoline stocks decreased sharply.

Crude inventories fell 933,000 barrels last week, the US Energy Information Administration reported, less than half the 2.3 million barrel decrease expected by analysts.

Fed cautious stance

The US Federal Reserve had signalled on Wednesday that it still plans two US rate hikes this year despite slower growth expectations, also hitting the oil market.

With a week to go before Britain votes on leaving the European Union, oil and other markets also remain in thrall to opinion polls, which are increasingly showing those supporting an exit are in the majority.

Brexit woes

A so-called Brexit will lead to a Europe-wide recession and hit demand for oil, many analysts say.

Brexit is continuing to dominate sentiment, so for the time-being data will continue to take a back seat.

Published on June 16, 2016 06:57