Share

Oil rebounds on easing Brexit fears, weaker dollar

New York - Oil prices rebounded Friday from six straight sessions in the red, benefitting from easing fears of a potential decision by Britain next week to exit the European Union.

The market was also buoyed by a softer greenback, which makes dollar-denominated crude oil cheaper for buyers using other currencies.

"The risk-off trade flow of a day ago has become risk-on, at least for now," said Tim Evans at Citi Futures as European stock markets rallied in a switch to betting that Britain will vote next Thursday to remain in the EU.

US benchmark West Texas Intermediate (WTI) for July delivery leaped $1.77 to $47.98 a barrel on the New York Mercantile Exchange.

In London, Brent North Sea crude for delivery in August, the global benchmark, advanced $1.98 to $49.17 a barrel.

But over a week of bumpy trade in markets rattled by fears of a pro-Brexit decision in the June 23 referendum, the price of WTI lost 2.2% and Brent fell 2.7%.

"We think crude oil will have trouble sustaining today's rally and remains at risk for a deeper correction to the downside," Evans said.

Gene McGillian of Tradition Energy pointed out that prices appeared to be trading in a narrow range.

"Overall the market rally seems to have lost momentum," McGillian said.

He cited the return of Canadian production to the market after massive wildfires and the possibility of talks between militant Nigerian groups and the government that could end attacks on oil infrastructure.

Those supply disruptions had helped push prices above $50.

"The market is still off the 12-year lows that we saw earlier this year and that's predicated on the fact that we're going to see a decline of the North American production level and increase of global demand," McGillian said.

In that context, the market seemed to shrug off this week's rise in active US oil rigs, the third in a row reported by driller Baker Hughes on Friday.

"I'm a little relucant to say it's a sign that we've reached the threshold where North American drillers are reentering the market," McGillian said.

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
18.92
-0.1%
Rand - Pound
23.91
-0.0%
Rand - Euro
20.45
+0.1%
Rand - Aus dollar
12.35
-0.0%
Rand - Yen
0.13
-0.1%
Platinum
911.00
+1.6%
Palladium
1,008.15
+0.6%
Gold
2,222.89
+1.3%
Silver
24.90
+1.0%
Brent Crude
86.09
-0.2%
Top 40
68,346
+1.0%
All Share
74,536
+0.9%
Resource 10
57,251
+2.9%
Industrial 25
103,936
+0.6%
Financial 15
16,502
-0.1%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders