Oil prices rise on Norway strike threat; Brexit shock fades

Published 2016-06-28, 08:30 p/m
© Reuters. Oil prices rise on Norway strike threat; Brexit shock fades
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* Falling crude output in Venezuela supports market
* US crude stocks could have dropped by nearly 4 mln barrels
-API

By Henning Gloystein
SINGAPORE, June 29 (Reuters) - Oil rose early on Wednesday
as financial traders poured money back into commodities
following the initial shock of Britain's vote to leave the
European Union, and as a potential strike in Norway and crisis
in Venezuela threatened to cut supply.
International Brent crude futures LCOc1 were trading at
$48.76 per barrel at 0019 GMT, up 18 cents from their last
settlement. U.S. West Texas Intermediate (WTI) crude CLc1 was
up 30 cents at $48.15 a barrel.
Both crude oil benchmarks had climbed on Tuesday after
financial markets shook off some of the shock of last week's
referendum in Britain in which most voters elected to exit the
EU, triggering turmoil across markets and regions.

"The risk-on tone should see commodities continue to push
higher," ANZ Bank said on Wednesday.
"Oil led the (commodities) sector as the shock of the UK
voting to leave the EU wore off. Oil gains were solidified by
news that the decline in Venezuela's oil output appears to be
accelerating, while a strike in Norway also looked like it would
impact production," it added.
Prices were also supported by supply fundamentals, as a
looming strike by Norwegian oil and gas field workers threatened
to cut output from the biggest North Sea producer.

Reports that oil producers and refiners in crisis-struck
Venezuela were struggling to keep output up due to power outages
and equipment shortages also supported prices, traders said.

Additionally, the American Petroleum Institute (API)
indicated in a preliminary report on Tuesday that crude
inventories could have fallen nearly 4 million barrels for the
week to June 24, some two-thirds more than the 2.4 million
barrels expected by analysts.
The U.S. Energy Information Administration will issue
official stockpile data on Wednesday.


(Editing by Joseph Radford)

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