Brexit : Crude oil prices sink over UK’s EU exit

July 6, 2016 3:45 pm

Oil prices fall more in Asia trade. (file photo)

Oil prices have taken another tumble over concerns about the United Kingdom’s recent vote to exit the ().
The
prices of crude experienced more slump on Wednesday in Asian trade as
the so-called vote continues to take a toll on equities and
currency markets.
The markets’ reaction follows a warning by the
Bank of England about risks from the June 23 Brexit vote that “have
begun to crystallize.” The UK money, the British pound, took a battering
not seen since mid-1985, thus sending markets and subsequently oil
prices into a nosedive.
Earlier this week, the British Brent dived 4.3 percent while America’s West Texas Intermediate shed 4.9 percent.
The
trend of losses continued Wednesday as Brent was down another 30 cents,
or 0.63 percent at $47.66, while West Texas Intermediate eased 33
cents, or 0.71 percent, to $46.27.
The two are well down from the levels above $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 in Seoul, South Korea, told Bloomberg.
“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.”
The
comes as the Organization of the Petroleum Exporting Countries
(OPEC) is said to have increased crude production last month.
Oil
prices had only recently rebounded from their January lows of under
$30, and in May briefly pushed past $50 a barrel for the first time this
year after the market gained support from production outages in Canada
and Nigeria.
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