Oil prices go up ahead of Brexit vote

Tokyo, Japan Updated: Jun 23, 2016, 06:07 AM(IST)

Oil prices rise in Asia and US ahead of Brexit vote Photograph:( Getty )

Oil prices rose in Asian trading on Thursday, shrugging off a smaller-than-expected decline in US stockpiles, as the market nervously awaited the result of Britain's "Brexit" vote.

Trading has been choppy in the run-up to Thursday's vote on whether Britain leaves or stays in the European Union (EU), although markets appear to have largely priced in a "Remain" vote.
Brent's August front-month contract was up 40 cents at $50.28 a barrel at 0217 GMT. It closed down 74 cents, or 1.5 per cent, at $49.88 a barrel on Wednesday.

Prices for US oil were also higher, rising 43 cents to $49.56 a barrel.

Once the Brexit vote is out of the way the oil market is likely to switch its focus to fundamentals, turning its attention to more potential supply disruptions that have sent prices higher this year.

The worsening crisis in Venezuela, the country with the highest oil reserves, may be the next source of supply concern, said Tony Nunan, oil risk manager at Mitsubishi Corp in Tokyo.

"There is a cloud hanging over the market from the Brexit vote, which is keeping prices down a bit," he said. "If the vote comes off, we could go up," Nunan said, referring to a vote to remain in the EU.

US crude inventories fell less than expected last week, while product inventories were up slightly, the US Energy Information Administration said on Wednesday.

Crude inventories dropped 917,000 barrels in the week ended June 17, compared with expectations for a decrease of 1.7 million barrels. It was the fifth consecutive week of drawdowns for crude inventories.

The Pound rose to a six-month high against the Dollar early on Thursday.

The Yen, often a safe-haven currency for risk-averse investors, was down about 0.25 per cent, while the Nikkei rose by slightly more than that.
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