LONDON: Oil edged lower for a third day on Wednesday, in response to uncertainty over the outlook for consumption due to weaker refinery demand and also a potential slowdown in economic growth after Britain’s decision to leave the European Union.
The British pound has slumped to a new 31-year low against the dollar after three UK property funds were suspended in the face of a rush of redemptions from investors fearing a slump in British property values.
In the United States, record demand from car drivers has not made much impact on a worldwide surplus of gasoline, which has weighed on refineries’ profitability, leading some to cut runs and throwing their demand for crude oil in doubt.
Investors also awaited data on U.S. crude inventories, delayed due to Monday’s Independence Day holiday.
Global benchmark Brent futures were down 27 cents at
$47.69 a barrel by 1339 GMT after a 4.1 percent drop on Tuesday.
U.S. crude traded at $46.48 a barrel, down 12 cents.
The contract fell 5 percent to end at $46.60 on Tuesday.
“Oil once again is testing key support levels and the inventory report will be the next focus, especially the level of gasoline inventories,” Ole Hansen, commodity strategist at Saxo Bank in Copenhagen, said.
He told the Reuters Global Oil Forum that Brent was edging closer to the technical support level of $47 a barrel and U.S. crude was rapidly approaching its support level of $45.8.
Analysts at Petromatrix said if WTI breaches this level, the next support test would be at $43.
The U.S. crude inventory data could change momentum if it shows another stock draw which could be a sign that a supply glut is starting to ease.
A Reuters poll showed analysts expected weekly U.S. commercial oil stocks to have fallen for a seventh consecutive week, along with a probable drop in gasoline stockpiles.
They forecast a 2.5-million-barrel draw in crude stocks and a 1.2-million-barrel fall in gasoline inventories.
The American Petroleum Institute (API) releases its data a day later than normal on Wednesday at 4:30 p.m. EDT (2030 GMT), while data from the U.S. government’s Energy Information Administration (EIA) is delayed to Thursday at 11 a.m. EDT (1500 GMT).
In a sign that U.S. crude production is holding up, U.S. Census Bureau data showed crude oil exports from the country reached a new record high of about 662,000 barrels per day in May.
