Oil rises above US$50 on US crude stocks data

LONDON: Oil rose further above US$50 (RM200) a barrel yesterday supported by an industry report that showed a large drop in US crude inventories and a boost in investor risk appetite ahead of Britain’s referendum on European Union (EU) membership.
US crude inventories fell by 5.2 million barrels, the American Petroleum Institute (API) said on Tuesday, far more than analysts expected. Official stocks data was due later yesterday from the US Department of Energy (DoE).
“What we have is basically the leftovers of the reaction from the API report,” Petromatrix oil analyst Olivier Jakob said of the oil price rise. “There is a risk that the DoE will not show a stock draw of the same magnitude.”
Brent crude was up 34 cents at US$50.96 a barrel at 1103 GMT. US crude climbed 44 cents to US$50.29, marking its first rise above US$50 since June 10.
Oil also benefited from a boost in risk appetite in global markets as investors were cautiously optimistic about a “remain” vote in the EU referendum today.
“Though some may be forgiven for thinking that the outcome is a foregone conclusion, the inconsistency between the betting money and the polls mean that conditions are ripe for a fresh bout of volatility,” said Stephen Brennock of oil brokers PVM.
The decline in US crude inventories, if confirmed by the Department of Energy figures, would be the fifth straight weekly drop and adds to signs that a supply glut which has halved oil prices in the last two years is easing. – Reuters