* Brexit concerns keep alive speculation of dollar rally
* Fed downgrades economic outlook but signals 2 rate hikes
* Crude below $50 vital for second-half supply deficit
-Goldman
* U.S. crude stocks fell by nearly 1 mln bbls -EIA
* Market expectations were for draw of 2.3 mln bbls
(New throughout, updates market activity and comments to
settlement)
By Barani Krishnan
NEW YORK, June 15 (Reuters) - Oil prices fell for a fifth
straight day on Wednesday, their longest losing stretch since
February, on worries Britain might leave the European Union
while the U.S. Federal Reserve signaled plans for two U.S. rate
hikes this year despite slower growth expectations.
A weekly draw in U.S. crude stockpiles helped crude futures
pare losses during the session, before prices fell again in
post-settlement trade.
Brent crude futures' front-month LCOc1 settled down 86
cents, or 1.7 percent, at $48.97 a barrel. In post-settlement
trade, it fell as low as $48.56 by 3:46 p.m. EDT (1946 GMT).
The front-month in U.S. crude's West Texas Intermediate
(WTI) futures CLc1 settled down 48 cents, or 1 percent, at
$48.01 per barrel. The session low was $47.55. In
post-settlement it fell to $47.45.
Goldman Sachs (NYSE:GS) said in a note that crude would need to trade
at $45-$50 per barrel for the market to reach a supply deficit
in the second half of 2016.
Oil prices have fallen without a break since June 8, for a
total loss of about 7 percent. Just a week ago, Brent hit 2016
highs of nearly $53 a barrel and WTI reached toward $52 after a
rash of supply disruptions, mostly out of Nigeria and Canada.
Wednesday's decline came as global markets slumped on fears
that Britain could vote on June 23 to leave the EU. The dollar
.DXY dipped against a basket of currencies but remained close
to a June 3 high on worries of the so-called Brexit. A stronger
dollar makes crude, priced in the U.S. currency, costlier in the
euro and others. MKTS/GLOB FRX/
The Fed kept interest rates unchanged for June as it lowered
economic growth forecasts for 2016 and 2017. But it still
signaled two rate increases this year.
"The downgrade of the economy by the Fed is definitely
weighing on crude oil prices aside from the Brexit concerns,"
said John Kilduff, partner at New York energy hedge fund Again
Capital.
"For oil to maintain its recent rally, we are looking for
strong demand going forward. That's been taken away, and you
still have rate hike possibilities to contend with."
U.S. crude stockpiles fell by 933,000 barrels last week, the
government-run Energy Information Administration (EIA) said,
versus market expectations for 2.3 million-barrel draws. EIA/S
"It's a mixed bag," Chris Jarvis, analyst at Caprock Risk
Management in Frederick, Maryland, said of the EIA data, which
also showed a bigger-than-expected draw in gasoline stocks and a
surprise build in distillates that included diesel.
"This will do little to move the needle in either direction
for oil prices and the energy market will continue to get its
cue from macro-economic environment and global equity markets,"
Jarvis added.