Oil market recovers after heavy losses

London: World oil prices rebounded yesterday from six straight sessions of losses, as investors eyed rising global equities, increasing risk appetite and easing Brexit concerns, dealers said.

Shortly after 1530 GMT, Brent North Sea crude for delivery in August rallied $1.35 to $48.54 a barrel.

US benchmark West Texas Intermediate (WTI) for July delivery won $1.25 to $47.46 per barrel compared with Thursday’s close.

“Oil prices are bouncing back ... after falling for six straight days, and also because of the small but general improvement in risk sentiment since Thursday afternoon in response to receding Brexit concerns,” said City Index analyst Fawad Razaqzada.

The market was also buoyed by a softer greenback, which makes dollar-denominated commodities cheaper for buyers using rival currencies.

Crude futures had tumbled Thursday as fears mounted about next week’s vote in Britain on membership of European Union, sending investors fleeing to the safety of the dollar.

With the British referendum just a week away, polls were showing the June 23 vote too close to call and momentum behind the “Leave” campaign.

However, global equities rebounded Friday on bargain-buying, as many analysts said the killing of a pro-EU British lawmaker had increased the odds Britons will vote next week to stay in the European Union.

The shooting of Labour MP Jo Cox -- by a man who reportedly shouted the name of a far-right, anti-EU group -- has now forced the cancellation of referendum campaigning for a third day on Saturday.

A potential Brexit had stoked concerns about a negative hit to the British economy and the EU, and the ripple effects throughout the weak global economy -- and the oil market.

Brent sank Thursday to its lowest closing level since May 9 and WTI sank to its lowest point in more than a month.

However, analysts predict the market remains on an upwards trajectory after striking recent 2016 peaks on the back of tight global supplies and the weak dollar.

“At the moment there is thus a lot of noise in the oil market, as not many people are sure what’s really going on,” added Razaqzada.

“Ultimately, however, the market has tightened as demand remains strong and US supply has fallen somewhat.”

Last week, Brent had forged an eight-month pinnacle above $52 and WTI had surged beyond $51 to the highest level since July 2015.

“The long term upward trend line since January is still in place for now and we think this will continue to offer strong support today given an absence of any significant macro data releases,” Sucden analyst Kash Kamal told AFP.

“Provided this level of support can hold, we could likely see it consolidate this week’s losses with the hopes of some stability heading into next week.”

Oil prices are still around 80 percent above February’s near 13-year lows.