Oil prices stage slight rebound

LONDON, June 23 — World oil prices rose today, reversing the previous day’s losses that were caused by a smaller-than-expected drop in US crude inventories.

Oil traders were meanwhile on tenterhooks as Britons headed to the polls in a high-stakes vote on whether to remain in the European Union.

As with other 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.

Around 1130 GMT, Brent North Sea crude for delivery in August was up 82 cents at US$50.70 (RM202.30) a barrel compared with yesterday’s close.

US benchmark West Texas Intermediate for August delivery won 71 cents to US$49.84 a barrel.

“Oil prices are on standby on the day of the Brexit referendum,” said Commerzbank analyst Carsten Fritsch.

“Despite polls showing a tightly contested result, the markets are firmly convinced that the pro-EU camp will win.”

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.

The latest opinion poll, an Ipsos MORI survey for the Evening Standard newspaper, put “Remain” on 52 per cent and “Leave” on 48 per cent.

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.

The oil market had 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 US$50 may lead more producers to renew pumping, adding on to an already saturated market.

Oil prices have rebounded since hitting lows of below US$30 in February, but current levels are still a long way off the 2014 highs of more than US$100. — AFP

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