Oil halted gains near $49 a barrel as markets awaited the U.K. referendum on staying in the European Union and weekly U.S. stockpile data.
Futures slid as much as 0.6 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 the U.K. vote is too close to call. U.S. 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 government data Wednesday.
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 U.S. trimmed a global surplus. Separate polls showed leads for both sides of the U.K. referendum before the vote on Thursday.
“Oil has been dominated by general market sentiment over the past week and less by specific oil factors,” Angus Nicholson, a markets analyst in Melbourne at IG Ltd., said by phone. “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 $55 to $60 level.”
West Texas Intermediate for July delivery, which expires Tuesday, lost as much as 31 cents to $49.06 a barrel on the New York Mercantile Exchange. Prices rose $1.39 to close at $49.37 a barrel on Monday. Total volume traded was about 56 percent below the 100-day average. The more-active August contract was 19 cents lower at $49.77 a barrel at 12:48 p.m. Hong Kong time.
U.S. Stockpiles
Brent for August settlement fell as much as 35 cents, or 0.7 percent, to $50.30 a barrel on the London-based ICE Futures Europe exchange. The contract rose $1.48, or 3 percent, to $50.65 a barrel on Monday. The global benchmark crude traded at a premium of 63 cents to WTI for August.
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U.S. crude inventories dropped for a fourth week to 531.5 million barrels through June 10, according to data from the Energy Information Administration. Drilling activity rose for a third week through Friday, with companies adding nine rigs to boost the total to 337, according to data from Baker Hughes Inc.
Oil-market news:
Marathon Oil Corp. will increase drilling activity as prices climb above $50 a barrel, according to Chief Executive Officer Lee Tillman. 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.