A warning from the Bank of England that there was evidence risks from the June 23 Brexit vote “have begun to crystallise” sent shudders through world markets, with the pound diving to levels not seen since mid-1985 and stock markets diving.
The uncertainty unleashed by Europe’s second biggest economy leaving the European Union battered the oil market this week, with Brent diving 4.3 per cent and West Texas Intermediate shedding 4.9 per cent yesterday.
The contracts today extended the losses. At 0330 GMT Brent was down 30 cents, or 0.63 per cent, at USD 47.66, while WTI eased 33 cents, or 0.71 per cent, to USD 46.27.
The two are well down from the levels above USD 52 touched at the start of last month.
“Uncertainties and concerns over how Brexit will influence the market is expected to last for a long time, increasing volatility in oil prices,” Will Yun, commodities analyst at Hyundai Futures in Seoul, told Bloomberg News.
“Even when we see a decline in stockpiles in the US, it’s not strong enough to push prices up unless there are some major production cuts.”
Adding to the downward pressure is news that oil cartel OPEC had boosted output in June, adding to an already painful global oversupply.
PTI