Oil prices rise ahead of Brexit vote

Pakistan Observer - - ECONOMY WATCH -

SIN­GA­PORE—Oil prices rose in Asia on Thurs­day, hours ahead of a high­stakes Bri­tish vote on whether to re­main in the Euro­pean Union. As with fi­nan­cial mar­kets, oil traders are closely watch­ing the ref­er­en­dum as an­a­lysts warn that a Bri­tish exit could see the coun­try tumble into re­ces­sion with global spillover ef­fects. Mar­kets tum­bled last week af­ter polls pointed to a win for the “leave” camp but they have ral­lied over the past four days as the pro-EU cam­paign has re­cov­ered mo­men­tum.

While most polls have the two sides neck and neck, book­mak­ers have the “re­main” side as clear favourites. Polls “are sus­cep­ti­ble to polling bias, but that has not stopped the pub­lic from tak­ing re­ported polls at face value”, said IG Mar­kets an­a­lyst Bernard Aw in a note.

“Mar­kets ap­peared to be pric­ing in a ‘re­main’ out­come,” he added. At about 0320 GMT, US bench­mark West Texas In­ter­me­di­ate was up 39 cents, or 0.79 per­cent, at $49.52 and Brent gained 34 cents, or 0.68 per­cent, to $50.22. Prices closed lower Wed­nes­day af­ter of­fi­cial data showed US crude in­ven­to­ries had fallen less than ex­pected.

The Depart­ment of En­ergy said com­mer­cial stock­piles last week dropped by 900,000 bar­rels, far fewer than the 1.5 mil­lion fore­cast by an­a­lysts, an in­di­ca­tion that the per­sis­tent sup­ply glut is not eas­ing as quickly as ex­pected. There are also con­cerns that oil above $50 may lead more pro­duc­ers to re­new pump­ing, adding on to an al­ready sat­u­rated mar­ket. Oil prices have re­bounded since hit­ting lows of below $30 in Fe­bru­ary, but cur­rent lev­els are still a long way off the 2014 highs of more than $100.—AFP

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