Oil prices rose 3 percent on Monday, settling higher for a second straight day, after polls showing a lower likelihood of Britain leaving the European Union while US gasoline surged 5 percent in anticipation of peak summer driving demand.
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Worldwide benchmark North Sea Brent for August delivery was up 35 cents, or 0.71 percent, trading at $49.52 a barrel.
US crude’s expiring July front-month contract was down 18 cents at $49.19 a barrel at 0046 GMT. A poll by Survation published in the Mail on Sunday newspaper showed 45% supported remaining in the European Union and 42% favored leaving. Global risk appetite got a boost after several weekend polls on Thursday’s crucial UK-EU referendum showed the “Remain” camp regaining some lost ground.
Saudi Arabia’s crude oil exports dropped in April despite high production levels, suggesting its battle for market share against USA shale drillers may be running its course. August Brent crude on London’s ICE Futures exchange rose $0.42 to $49.59 a barrel. The U.K. entered the final week of campaigning ahead of its referendum on European Union membership that is being watched by governments and investors around the world amid worries a so-called Brexit would spark a wave of turmoil across global markets. “We are likely to face volatile trading in the coming four to five days”.
“At halfway in 2016 the oil market looks to be balancing”, the IEA said. The price for Brent was up 1.9 percent at the start of trading in NY to open the day at $50.11 per barrel. Oil prices might fall by up to 5% if the United Kingdom votes to leave the bloc, but those declines would be temporary, Mr. Wittner said.
In turn, this has increased appetite for riskier assets including equities and crude oil.
Oil prices continued to recover despite data showing USA energy firms adding oil rigs for a third week in a row, suggesting higher production to come.
“Yet while tentative signs of rising drilling activity have materialized in a rising rig count in recent weeks, many producers are nervous about ramping up drilling operations without seeing a period of price stability”, Matt Smith, director of commodity research at ClipperData, said in a note.
In refined product markets, gasoline futures ended at 5.1% higher at $1.5827 a gallon, and diesel futures rose 3.1% to $1.5274 a gallon.
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– Nicholas Winning and Jason Douglas contributed to this article.
