Oil Rises as Investors Await Brexit Vote

An offshore oil platform is seen at the Bouri Oil Field off the coast of Libya
REUTERS/Darrin Zammit Lupi

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/ Source: Reuters
By Reuters

Oil prices edged higher on Thursday, shrugging off a smaller than expected draw on U.S. crude stocks as money and equity markets firmed on the last sweep of opinion polls showing Britons favored to remain in the European Union.

Global markets, including commodities, have been on tenterhooks for weeks ahead of Britain's so-called Brexit referendum on Thursday. The majority of results are expected to come in after 8:00 p.m. EST after voting closes at 9:00 p.m. UK time.

REUTERS/Darrin Zammit Lupi

Global benchmark front-month Brent crude was trading up 31 cents at $50.19 a barrel. U.S. futures stood at $49.39, up 26 cents day on day.

"Most market participants are positioned ahead of the Brexit voting or are waiting on the sidelines to see the final outcome," said Hans van Cleef, senior energy economist at ABN Amro.

Some of the last opinion polls published late on Wednesday, hours before voting started, showed the "Remain" campaign was ahead.

This propelled sterling to a 2016 high against the dollar on Thursday and London's FTSE 100 index was up 0.8 percent.

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Oil defied bearish news that U.S. weekly crude inventories dropped by less than expected. The Energy Information Administration said on Wednesday that stocks fell by 917,000 barrels in the week to June 17, compared with expectations of a 1.7 million barrel decrease.

If Britain votes to remain in the EU, the oil market is likely to switch its focus to fundamentals, returning its attention to potential supply disruptions that have already sent prices higher this year.

Saudi Arabia's energy minister told state-owned television that the oil market was returning to balance and prices had risen in response to supply and demand edging closer to equilibrium.