Oil down fifth day; Brexit, Fed hike fears offset U.S. crude draw

Wed Jun 15, 2016 3:51pm EDT
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By Barani Krishnan

NEW YORK (Reuters) - Oil prices fell for a fifth straight day on Wednesday, their longest losing stretch since February, on worries Britain might leave the European Union while the U.S. Federal Reserve signaled plans for two U.S. rate hikes this year despite slower growth expectations.

A weekly draw in U.S. crude stockpiles helped crude futures pare losses during the session, before prices fell again in post-settlement trade.

Brent crude futures' front-month LCOc1 settled down 86 cents, or 1.7 percent, at $48.97 a barrel. In post-settlement trade, it fell as low as $48.56 by 3:46 p.m. EDT (1946 GMT).

The front-month in U.S. crude's West Texas Intermediate (WTI) futures CLc1 settled down 48 cents, or 1 percent, at $48.01 per barrel. The session low was $47.55. In post-settlement it fell to $47.45.

Goldman Sachs said in a note that crude would need to trade at $45-$50 per barrel for the market to reach a supply deficit in the second half of 2016.

Oil prices have fallen without a break since June 8, for a total loss of about 7 percent. Just a week ago, Brent hit 2016 highs of nearly $53 a barrel and WTI reached toward $52 after a rash of supply disruptions, mostly out of Nigeria and Canada.

Wednesday's decline came as global markets slumped on fears that Britain could vote on June 23 to leave the EU. The dollar .DXY dipped against a basket of currencies but remained close to a June 3 high on worries of the so-called Brexit. A stronger dollar makes crude, priced in the U.S. currency, costlier in the euro and others. [MKTS/GLOB] [FRX/]

The Fed kept interest rates unchanged for June as it lowered economic growth forecasts for 2016 and 2017. But it still signaled two rate increases this year.   Continued...

Offshore oil platforms are seen at the Bouri Oil Field off the coast of Libya August 3, 2015. REUTERS/Darrin Zammit Lupi