June 16, 2016 / 8:32 AM / 3 years ago

Oil slides 4 percent on worry of market turmoil if UK leaves EU

NEW YORK (Reuters) - Oil prices slumped about 4 percent and hit one-month lows on Thursday, settling down for a sixth straight day, on fears of global economic turmoil if Britain exits the European Union.

A worker looks at a pump jack at an oil field Buzovyazovskoye owned by Bashneft company north from Ufa, Bashkortostan, Russia, July 11, 2015. REUTERS/Sergei Karpukhin/File Photo

It was the longest slide for oil since early January, when prices fell seven days in a row before hitting 12-year lows below $30 a barrel on worries about a global crude glut.

This time around, a resurgent dollar is hammering crude futures and other commodities on speculation that Britain could vote to end its EU membership. [MKTS/GLOB]

The dollar .DXY hit two-week highs, then eased back on the sterling’s GBP= strength as Britain suspended campaigning over its EU membership status after a deadly attack on a Member of Parliament.

Oil pared losses as the sterling rose, but crude tumbled again in post-settlement trade to reach new lows on the day.

Brent crude futures’ front-month contact LCOc1 settled down $1.78, or 3.6 percent, at $47.19 per barrel. In post-settlement trade, it fell to as low as $46.94, its lowest since May 12.

Brent has lost about $5 a barrel, or around 10 percent, over the past six sessions. Prior to that, it hit an eight-month high of nearly $53 on supply disruptions out of Nigeria and Canada.

The front-month in U.S. West Texas Intermediate (WTI) crude futures CLc1 settled down $1.80, or 3.8 percent, at $46.21 a barrel. It got to a May 13 low of $45.91 after the close.

Drawdowns in U.S. crude inventories over the past month have not provided much support to oil with investors focused more on a possible rise in production as Brent and WTI traded above $50 a barrel each. U.S. energy firms added rigs drilling for oil for a second week in a row last week. [RIG/U]

“While oil is obviously getting swept up in the bearish tide of declining equities, falling bond yields and firming dollar, we also see a gradual turn in global oil balances more conducive toward $45 crude than levels above $50,” said Jim Ritterbusch of Chicago-based oil markets consultancy Ritterbusch & Associates.

The Energy Information Administration said on Wednesday domestic crude inventories USOILC=ECI fell 933,000 barrels last week, less than half the 2.3-million-barrel decrease forecast.

On Thursday, market intelligence firm Genscape reported a weekly decline of 76,317 barrels in stockpiles at the Cushing, Oklahoma delivery point for WTI futures, traders who saw the data said. In the previous week, Genscape reported a drawdown of 299,058 barrels at Cushing.

Additional reporting by Karolin Schaps in LONDON; Editing by Elaine Hardcastle and David Gregorio

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