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Oil Prices Jump as Investors Bet Against Brexit

June 23, 2016 at 17:40 by Andrew Moran

Oil prices edged higher on Thursday as Britons vote in a referendum to Leave or Remain in the European Union (EU). Investors are betting against a Brexit, which has been good news for oil as it attempts to recoup the losses it suffered on Wednesday.

August West Texas Intermediate crude prices rose $0.41, or 0.83%, to $49.54 per barrel at 13:14 GMT on the New York Mercantile Exchange. August Brent crude prices jumped $0.46, or 0.92%, to $50.34 a barrel on London’s ICE Futures exchange.

Oil prices have been recovering after hitting a 13-year low of $27 a barrel earlier this year. In June, oil prices climbed above $50 a barrel for the first time since July 2015 before retreating.

The rise in oil prices is being supported by a strong appetite for risk. Meanwhile, the demand for safe haven assets, like gold and silver, has been gradually fading.

Following the latest Brexit poll that found the Remain camp had some momentum prior to the referendum, oil prices as well as the US and European stock markets have been gaining. The results of the vote will either have a positive or negative effect on North American markets beginning on Friday.

Due to the immense focus on a potential Brexit, oil prices have been largely unaffected by a disappointing decline in US crude stockpiles last week. According to the Energy Information Administration (EIA), US crude inventories were reduced by 900,000 barrels because of an increase in imports.

The EIA stated in the same report on Wednesday that there was an unexpected weekly spike in US gasoline inventories.

If you have any questions and comments on the commodities today, use the form below to reply.

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