Oil extends slide on worries about impact of Brexit

Singapore - Oil prices suffered fresh losses in Asian trade on Monday as the fallout from last week's decision by Britain to leave the European Union batters confidence and ushers in a period of uncertainty.

Global markets took a beating on Friday, with some $2.1trn wiped off valuations and the British pound plunging to 31-year lows against the dollar, while oil prices slumped more than five percent.

And on Monday crude fell further. At about 04:00 GMT, the US benchmark West Texas Intermediate fell 26 cents, or 0.55%, to $47.38 and Brent shed 15 cents, or 0.15%, to $48.26.

Both contracts have tumbled almost 10% from their 2016 highs touched earlier this month.

"While the oil market fundamentals will ensure no major drop in the price of crude, as the UK accounts for less than two percent of global demand, the oil markets are likely to remain under pressure until the volatility in the financial markets comes down," said EY Services oil and gas analyst Sanjeev Gupta.

"Everything is caught up in Brexit," Evan Lucas, a market strategist at IG in Melbourne told Bloomberg News.

"The oil fundamentals for the moment will be put to one side as markets try to figure out exactly how this will all work," he added.

Adding to the downward pressure on crude is the strengthening of the dollar, with traders fleeing to the currency's relative safety. A stronger dollar makes dollar-priced commodities like oil more expensive for those using other currencies.

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For 14 free days, you can have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today. Thereafter you will be billed R75 per month. You can cancel anytime and if you cancel within 14 days you won't be billed. 
Subscribe to News24
Rand - Dollar
Rand - Pound
Rand - Euro
Rand - Aus dollar
Rand - Yen
Brent Crude
Top 40
All Share
Resource 10
Industrial 25
Financial 15
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders