Oil prices rose in Asian trading on Wednesday, with US crude joining Brent above $50 a barrel after data from the American Petroleum Institute (API) showed a larger than expected draw on stocks.
US crude futures’ August contract, the new front month from Wednesday, climbed 35 cents to $50.20 a barrel by 0604 GMT, marking its first rise above $50 since June 10.
Brent crude futures were up 32 cents at $50.94 a barrel.
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- Crude oil futures rise after U.S. stockpiles fall
US crude inventories fell by 5.2 million barrels for the week ended June 17, the API said. The trade group’s figures were triple the draw of 1.7 million barrels forecast by analysts in a Reuters poll.
The US government’s Energy Information Administration will issue official stockpile data on Wednesday.
Markets remain jumpy over the possibility the United Kingdom will vote to leave the European Union on Thursday in a referendum, with polls showing little difference between the “remain” and “leave” camps.
The dollar erased early modest gains on Wednesday with sterling near a six-month high on the eve of the referendum.
Japan’s Nikkei closed nearly 0.6 per cent lower, while gold prices were down 0.4 per cent.
“Strengthening in the dollar and weakness in other currencies would … be directionally short-term bearish for crude oil” in the event of a British exit, Societe Generale said in a research note.
A stronger dollar makes oil more expensive because it raises the cost for imports for most of the world’s countries. Still, fundamentals could come into play once the dust settles from the vote.
“Global demand growth is quite robust, driven by the US, China, India and other emerging markets,” Societe Generale said. “On the supply side, declining US crude production is expected to underpin a trend of lower non-OPEC production.”