Oil prices have reached two-week low
Oil prices have reached two-week low on Tuesday, as global fears about Brexit put pressure on risky assets.
According to two opinion polls published on Monday, the supporters of British exit from the EU continued to grow in number ahead of the referendum on June 23.
If the UK leaves the European Union, the recession in Europe may increase. As a result, it might put a pressure on the global economy.
On the ICE futures exchange, Brent crude oil for August delivery reached its intraday low of $49,61 per barrel, the minimum readings since June 3. At 07:55 GMT, the price is $49,68, lower by 67 cents (or 1,33%).
A day earlier in London, Brent futures fell by 19 cents (or 0.38%). Brent prices increased by almost 90% since briefly slumped below $30 per barrel in mid-February. That happened as unplanned supply disruptions from Africa eased concerns over the global oversupply.
Trader will focus on the International Energy Agency monthly report on oil market condition. Their monthly report released on Monday states that OPEC has proven the forecast of world oil reserves growth and demand increase.
WTI crude oil for delivery in July fell by 71 cents (or 1.45%) on NYMEX. WTI was traded at $48 per barrel at the beginning of session and reached its minimum of $48,11 per barrel, the lowest price since June 2.
The oil price in New York lost 19 cents (or 0.39%) on Monday. Genscape industry group reported about the WTI oil reserve growth by 525.000 barrels in Cushing, Oklahoma, last week.
Bidders now focused on the fresh weekly data on oil reserve and oil products. The American Petroleum Institute plans to release its inventory report today. The government data is expected on Wednesday and might show oil reserves reduction by 2.3 million barrels within the week ended June 10.
The U.S. oil futures rose by almost 85%, after slumped up to its 13-year minimum of $26.05 in February. The decline in the US shale oil production improved the market sentiment. However, since the prices reached the profitable level for some companies to start drilling, the number of drilling rigs may grow, and the reduction in the US production may slow down.
According to Baker Hughes, the supplier of oilfield services, the number of drilling rigs in the US increased by 3 up to 328 last week.
The growth in number of drilling rigs in the United States is fueling speculation. The oil production in the country could rebound in the coming weeks, proving oversupply concerns.
Moreover, the spread between Brent and WTI oil grades is $1,51 per barrel, compared to $1,47 at the close time of the previous session.