Oil prices rise with recovering global markets

[SINGAPORE] Oil prices extended gains in Asia on Wednesday, tracking a recovery in equity markets as leaders look to temper fears over the effects of Britain's shock EU exit, while traders bet on measures negate any turmoil.

After Friday's global sell-off, Asian stocks and currencies have recovered this week as speculation swirls that authorities will inject fresh stimulus into financial markets.

Seoul on Tuesday unveiled a US$17 billion plan to support South Korea's already fragile economy, while news emerged Wednesday that Japan's leaders were holding talks on how to contain any tailwind from the Brexit crisis.

Also on Tuesday, European Central Bank boss Marion Draghi said central banks should aim to align monetary policies to mitigate "destabilising spillovers".

European leaders who gathered in Brussels for a two-day meeting urged Britain to act quickly to resolve the political and economic mayhem unleashed by the vote.

At about 0330 GMT, US benchmark West Texas Intermediate rose 37 cents, or 0.77 per cent, to US$48.22 and Brent added 30 cents, or 0.62 per cent, to US$48.88.

"The primary driver of the oil market is probably Brexit-related volatility at the moment," Ric Spooner, chief analyst at CMC Markets in Sydney, told Bloomberg News.

Analysts said crude prices were also supported by worries about a potential strike in Norway's oil industry, which could affect almost a fifth of the country's output.

And a slight weakening of the dollar, as traders shift out of safe haven investments, also helped as it made crude less expensive for buyers holding other currencies.

Official data on US commercial crude stockpiles, which is used to gauge demand in the world's top oil consumer, is due later on Wednesday.

AFP