Oil halted gains near US$49 a barrel as markets awaited the UK referendum on staying in the EU and weekly US stockpile data.
Futures slid as much as 0.9 percent in New York after gaining 6.8 percent the previous two days. Asia stocks reversed earlier losses and the Bloomberg Dollar Spot Index slipped for a fifth day as polls showed that the UK vote is too close to call.
US inventories probably fell by 1.5 million barrels last week, keeping them more than 100 million barrels above the five-year average, according to a Bloomberg survey before US government data due today.
Oil has advanced more than 85 percent from the lowest level in 12 years as disruptions from Nigeria to Canada and falling output in the US trimmed a global surplus.
Separate polls showed leads for both sides of the UK referendum before the vote tomorrow.
“Oil has been dominated by general market sentiment over the past week and less by specific oil factors,” Angus Nicholson, a markets analyst for IG Ltd in Melbourne, Australia, said by telephone. “That will probably continue for the rest of the week and the Brexit vote is on everyone’s mind at the moment. Long-term supply concerns with drill rigs coming back to market will probably cap any major rallies toward the [US]$55 to [US]$60 level.”
West Texas Intermediate for delivery next month lost as much as US$0.46 to US$48.91 per barrel on the New York Mercantile Exchange. Prices rose US$1.39 to close at US$49.37 per barrel on Monday. Total volume traded was about 51 percent below the 100-day average. The more-active August contract was US$0.38 lower at US$49.58 a barrel at 3:02pm Hong Kong time.
Brent for August settlement fell as much as US$0.57, or 1.1 percent, to US$50.08 per barrel on the London-based ICE Futures Europe exchange. The contract rose US$1.48, or 3 percent, to US$50.65 a barrel on Monday. The global benchmark crude traded at a premium of US$0.61 to West Texas Intermediate for August.
US crude inventories dropped for a fourth week to 531.5 million barrels through June 10, according to data from the US Energy Information Administration.
Drilling activity rose for a third week through Friday last week, with companies adding nine rigs to boost the total to 337, according to data from Baker Hughes Inc.
Marathon Oil Corp is to increase drilling activity as prices climb above US$50 a barrel, company chief executive officer Lee Tillman said.
Saudi Arabia cut shipments in April to the lowest level in six months as overseas refineries bought less due to seasonal maintenance and the kingdom burned more oil at home to power air conditioners.
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