Investing.com - Oil prices added to overnight losses in North American trade on Thursday, giving back more than half of the prior session’s sharp rally as investors kept an eye on the fallout from the U.K.'s decision to leave the European Union.
Former London mayor Boris Johnson abruptly pulled out of the race to become Britain's next prime minister on Thursday, in a shock move that upturned a political order shaken by last week's vote to leave the European Union.
Meanwhile, Britain’s Justice Secretary Michael Gove, one of the main campaigners to take Britain out of the EU, said on Thursday he would run to become prime minister. Interior Minister Theresa May, who campaigned to remain in the EU, also announced her candidacy to lead the party.
Other Conservative Party politicians to declare they are standing to replace Cameron so far are Welsh Secretary Stephen Crabb and Defence Secretary Liam Fox.
Crude oil for August delivery on the New York Mercantile Exchange slumped $1.18, or 2.37%, to trade at $48.70 a barrel by 13:37GMT, or 9:37AM ET.
A day earlier, New York-traded oil rallied $2.03, or 4.24%, the strongest daily advance since April, after data showed that oil supplies in the U.S. fell more than expected last week, while domestic crude output continued its decline.
The U.S. Energy Information Administration said in its weekly report that crude oil inventories fell by 4.1 million barrels last week to 526.6 million. Market analysts' expected a crude-stock decline of 2.4 million barrels.
Meanwhile, U.S. crude production stood at 8.62 million barrels per day as of last week, down from a peak of over 9.6 million bpd last year.
Elsewhere, on the ICE Futures Exchange in London, Brent oil for September delivery dropped $1.20, or 2.34%, to trade at $50.12 a barrel, after surging $2.06, or 4.18%, on Wednesday.
Fears of sharp production cuts from a looming strike by Norway's oil sector eased as output from the North Sea's biggest producer would only fall by about 7% in case of a walk-out, according to Norway's Petroleum Directorate.
About 7,500 workers on seven oil and gas fields in Norway could go on strike from Saturday if a new wage deal is not agreed before a Friday deadline.