with agency report
Oil prices topped $48 a barrel on Tuesday, as investors took advantage of a two-day slide in crude oil triggered by Britain’s vote to leave the European Union.
The vote’s impact on oil, despite sending global stocks and currencies spiraling, has so far been limited due to expectations of strong summer demand in Asia and the United States and tightening supplies after a two-year rout.
A looming strike at several Norwegian oil and gas fields, which threatened to cut output in Western Europe’s biggest producer, also helped support prices yesterday.
According to Reuters, Brent crude futures were up 2.5 per cent, or $1.17, at $48.33 per barrel at 1116 GMT.
U.S. West Texas Intermediate (WTI) futures were 2.6 per cent higher, up $1.22 at $47.55 a barrel.
A report by industry monitor, Genscape that showed a 1.3 million barrel fall in crude inventories at the benchmark’s pricing hub in Cushing, Oklahoma, added further support, brokerage firm PVM said.
Sterling and London’s FTSE 100 stock market index also rose on hopes of a coordinated central bank response to financial market losses.
“Oil is recovering on some bargain hunting after the drop below $47 a barrel proved unsustainable and news of a possible strike in Norwegian oil and gas industry,” said Commerzbank analyst Carsten Fritsch.
He said the turmoil in Europe was not expected to have a “meaningful impact on the physical global supply and demand balances”.
Over its two previous sessions, oil fell more than 7 per cent to seven-week lows as the Brexit vote cooled investor appetite for volatile commodities such as oil.
A strike in Norway, which could start on Saturday, would add to a number of production outages in oil-producing countries including Nigeria.
Still, news that a successful ceasefire in Nigeria had allowed repairs to oil pipelines weighed on the market, ANZ Bank said.
Oil production in Nigeria has risen to about 1.9 million barrels per day from 1.6 million, the Minister of State for Petroleum Dr. Ibe Kachikwu, confirmed yesterday.