MK: Crude Oil Inched Higher ahead of the Brexit Vote
After showing weakness on June 22 due to the disappointing inventory report, crude oil started Thursday on a positive note. At 6:39 AM EST, the West Texas Intermediate crude oil futures contract for August delivery was trading at $49.89 per barrel—a gain of 1.6%. Brent crude was trading at $50.79 per barrel—a rise of 1.8%.
The Market is looking forward to the results of the EU (European Union) referendum that decides if the United Kingdom stays in or leaves the EU. This gained much more interest because the poll results are close for the “Remain” and “Stay” campaigns. The “Remain” campaign is in the lead. The United Kingdom leaving the EU could impact the global economy. These fears subsided after the murder of Jo Cox—a Labor Party lawmaker. The “Remain” campaign gained the lead in polls conducted after the incident. The results are expected to be released by around 2 AM EST on Friday, June 24.
Disappointing inventory report
Even though the decline in Brexit fears supported the oil market on June 22, the less-than-expected drawdown reported by the EIA (U.S. Energy Information Administration) dampened the sentiment and caused prices to drop. According to the weekly crude oil inventory report released by the EIA at 10:30 AM EST on Wednesday, crude oil inventories fell by 0.92 MMbbls (million barrels) in the last week. This is less than the Market’s expected decline of 1.67 MMbbls of crude oil. Read Inventory Report Dragged Crude Oil down on June 22 to learn how the inventory report impacted crude oil prices on Wednesday.
On Wednesday, June 22, major crude oil producers Carrizo Oil & Gas (CRZO), Canadian Natural Resources (CNQ), British Petroleum (BP), and Total S.A. (TOT) fell 1.2%, 2%, 0.76%, and 0.54%, respectively. The SPDR S&P Oil & Gas Exploration and Production ETF (XOP) and the PowerShares DB Oil ETF (DBO) fell 0.86%. Read Energy Sector Weakened on Wednesday as Oil Fell to learn how crude oil–related stocks performed on June 22.
In the next part, we’ll discuss how precious metals performed on Thursday morning.
