London: Oil prices were on their way back down in European markets on Friday morning as a stronger dollar and uncertainty over Britain’s vote to leave the EU troubled traders.
North Sea Brent crude for delivery in September was down to $49.33 (Dh181.04) per barrel at around 1030 GMT, down 13 cents on Thursday’s close.
West Texas Intermediate, meanwhile, was trading at $48.02 per barrel, paring 31 cents off Thursday’s price.
Bank of England governor Mark Carney’s “dovish comments” on Thursday — when he floated a possible interest rate cut to try and alleviate the blow to confidence of June 24’s referendum — “plus warnings of global contagion” have raised fears for future growth and hit demand for oil, analysts Michael van Dulken and Augustin Eden of Accendo Markets said.
Carney’s comments further weakened the pound and the euro, leaving the dollar bolstered in response.
Disruptions
Demand for dollar-denominated oil softened in turn as holders of other currencies found their purchasing power weakened.
Prices were also sapped from the supply side as the prospect of disruptions to production in Nigeria and Norway receded.
Despite this week’s fall in US crude stockpiles, a sustained price rise will only come if producers make meaningful cuts in output, David Lennox, a resource analyst at Fat Prophets in Sydney, told Bloomberg News.
“The market is waiting for real production cuts, and until that happens any strong rally in the oil price is just not going to be sustainable,” he said.
