Oil jumps 4 percent as Brexit fears ease, still down on week

Baku, Fineko/abc.az. The world prices for oil, which slumped yesterday by 3.7-3.8%, did not stop crushing the effectiveness of the EU industry through the premium status of oil in the European markets and providing the price advantage for the U.S.at the oil market.

Oil fell a sixth day, heading for the longest run of declines since February, amid signs that global supply disruptions are fading, offsetting a United States crude stockpile drop.

Also, Canadian production, which was hammered by severe wildfires in May, is expected to slowly recover as the blazes diminish.

Brent crude futures were up 25 cents at US$47.44 (RM196) a barrel at 0040 GMT. Russian Oil Minister Alexander Novak said in a Bloomberg TV interview Thursday there’s no need right now for Russia and Saudi Arabia to cooperate on influencing crude markets.

Despite a decline in USA oil inventories, global crude oil prices still moved lower this week, paving the way for lower domestic fuel price expectations for next week, the sources said.

The US Department of Energy said commercial inventories fell by 900,000 barrels in the week ending June 10.

Worries over deteriorating global economic fundamentals due to a possible Brexit also led many investors to move their funds to the US dollar and dollar-denominated assets, which placed more downward pressure on worldwide crude prices, they said.

The front-month in U.S. West Texas Intermediate (WTI) crude futures settled down $1.80, or 3.8 percent, at $46.21 a barrel.

“Risk aversion continues to stay on the table, even as the Federal Open Market Committee votes to leave interest rates unchanged at 0.5%”, said Barnabas Gan, an economist at Singapore bank OCBC.

The turnaround in bullion prices, their first drop in seven sessions, came after rallying to the highest in almost two years, buoyed by the US Federal Reserve, which sounded a dovish note after its latest policy meeting on Wednesday.

But those factors offer “excuses” rather than reasons for oil’s recent price retreat, Tom Kloza, global head of energy analysis at the Oil Price Information Service, told MarketWatch.

Crude oil prices moved higher in early Friday trading, though much of that may be a corrective action following a seven-day losing streak. In the previous week to 7 June, Genscape reported a drawdown of 299,058 barrels at Cushing.