Oil prices were up slightly on Thursday, shrugging off a smaller-than-expected decline in U.S. stockpiles, as the market nervously awaited the result of Britain’s “Brexit” vote.
Trading has been choppy in the run up to Thursday’s vote on whether Britain leaves or stays in the European Union (EU), although markets appear to have largely priced in a “Remain” vote.
Brent’s front-month August contract LCOc1 was up 5 cents at $49.93 a barrel at 0654 GMT. It closed down 74 cents, or 1.5 percent, at $49.88 a barrel on Wednesday.
U.S. oil CLc1 was up 1 cent to $49.14 a barrel, after slipping lower earlier. Both contracts were up for most of the day in Asian trading.
Once the Brexit vote is out of the way the oil market is likely to switch its focus to fundamentals, turning its attention to more potential supply disruptions that have sent prices higher this year.
The worsening crisis in Venezuela, the country with the highest oil reserves, may be the next source of supply concern, said Tony Nunan, oil risk manager at Mitsubishi Corp in Tokyo.
“There is a cloud hanging over the market from the Brexit vote, which is keeping prices down a bit,” he said. “If the vote comes off, we could go up,” Nunan said, referring to a vote to remain in the EU.
U.S. crude inventories fell less than expected last week, while product inventories were up slightly, the U.S. Energy Information Administration said on Wednesday.
Crude inventories USOILC=ECI dropped 917,000 barrels in the week ended June 17, compared with expectations for a decrease of 1.7 million barrels. It was the fifth consecutive week of drawdowns for crude inventories.
The pound rose to a six-month high against the dollar on Thursday.
The yen JPY=, often a safe-haven currency for risk averse investors, was up slightly after falling earlier, while the Nikkei .N225 closed 1 percent higher.
Source: Reuters
