Oil prices dip as Brexit is hit by world market

The Dollar Business Bureau

On Wednesday, the oil prices took a downward trade in the Asian trade, tracking the losses across the currency markets and equities as there are fears about the impact of Britain’s exit from the European Union.

There are concerns in the market about investors fleeing high risk assets. The Bank of England’s warning that there was evidence risk from theJune 23 Brexit vote has started to crystalize and has managed to send shudders through the world market.

This situation has brought down pounds to a position that has not been witnessed since mid-1985 with the stock markets too witnessing a steep dive.

Britain’s exit from the EU has battered the oil market this week with Brent diving 4.3 per cent and West Texas Intermediate shedding 4.9 percent.

On Wednesday, the contracts extended losses. Brent was down by 30 cents or 0.63 percent at $47.66. WTI eased 33 cents or 0.71 per cent at $46.27.

Will Yun, commodities analyst at Hyundai Futures in Seoul told Bloomberg, “Uncertainties and concerns over how Brexit will influence the market is expected to last for a long time, increasing volatility in oil prices.”

He also added that, “Even when we see a decline in stockpiles in the US, it is not strong enough to push prices up unless there are some major production cuts.”

Both Brent and WTI are well down from the levels and above $52 that touched at the start of previous month.

But oil cartel OPEC has boosted their output in June.