Oil prices fall with world mar­kets, stock­piles data eyed

Pakistan Observer - - ECONOMY WATCH -

SIN­GA­PORE—Oil prices fell more than one per­cent in Asia Tues­day, ex­tend­ing a sell­off on spec­u­la­tion about a pick-up in pro­duc­tion while world mar­kets are rat­tled by fears over Bri­tain’s pos­si­ble exit from the Euro­pean Union. Af­ter a rally in the com­mod­ity that saw the US bench­mark hit an 11-month high last week, in­vestors are be­gin­ning to cash in and search out safe havens such as the yen and gold. Eq­ui­ties mar­kets around the world have been tum­bling since late last week on wor­ries about the global econ­omy and cen­tral banks’ abil­ity to pro­vide sup­port.

Those anx­i­eties are be­ing com­pounded by the real pos­si­bil­ity that Bri­tain will vote to leave the Euro­pean Union, with sev­eral polls put- ting the pro-exit cam­paign in front just over a week be­fore the bal­lot. Sup­ply-side wor­ries have also in­creased af­ter a Nige­rian mil­i­tant group on Sun­day urged other rebels to join peace ne­go­ti­a­tions with the govern­ment to put an end to at­tacks on the na­tion’s oil in­stal­la­tions. Also, Cana­dian pro­duc­tion, which was ham­mered by se­vere wild­fires in May, is ex­pected to slowly re­cover as the blazes di­min­ish.

At about 0345 GMT, US bench­mark West Texas In­ter­me­di­ate fell 56 cents, or 1.15 per­cent, to $48.32 and Brent slipped 51 cents, or 1.01 per­cent, to $49.84. With prices hav­ing risen more than 80 per­cent since hit­ting near 13year lows at the start of the year, com­pa­nies are bring­ing more rigs back on­line as they be­come more eco­nom­i­cally vi­able. “While US pro­duc­tion has been con­sis­tently de­clin­ing, there is the risk now that prices have reached a level where com­pa­nies are happy to put drill rigs back to work and we could start see­ing out­put climb­ing again in a month or two,” Mel­bourne-based IG mar­kets an­a­lyst An­gus Ni­chol­son told Bloomberg News. “We are also see­ing a bit of ner­vous­ness across mar­kets given the (Bri­tish EU) vote comes up next week,” he added.—AFP

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