Oil halts gain near US$49 as markets await Brexit vote, stockpiles

[HONG KONG] Oil halted gains near US$49 a barrel as markets awaited the UK referendum on staying in the European Union and weekly US stockpile data.

Futures slid as much as 0.6 per cent in New York, after gaining 6.8 per cent the previous two days. Asia stocks reversed earlier losses and the Bloomberg Dollar Spot Index slipped for a fifth day as polls showed the UK vote is too close to call.

US inventories probably fell by 1.5 million barrels last week, keeping them more than 100 million barrels above the five-year average, according to a Bloomberg survey before government data Wednesday.

Oil has advanced more than 85 per cent from the lowest level in 12 years as disruptions from Nigeria to Canada and falling output in the US trimmed a global surplus. Separate polls showed leads for both sides of the UK referendum before the vote on Thursday.

"Oil has been dominated by general market sentiment over the past week and less by specific oil factors," Angus Nicholson, a markets analyst in Melbourne at IG Ltd, said by phone.

"That will probably continue for the rest of the week and the Brexit vote is on everyone's mind at the moment. Long-term supply concerns with drill rigs coming back to market will probably cap any major rallies toward the US$55 to US$60 level."

West Texas Intermediate for July delivery, which expires Tuesday, lost as much as 31 US cents to US$49.06 a barrel on the New York Mercantile Exchange. Prices rose US$1.39 to close at US$49.37 a barrel on Monday. Total volume traded was about 56 per cent below the 100-day average.

The more-active August contract was 19 US cents lower at US$49.77 a barrel at 12:48 pm Hong Kong time.

US Stockpiles Brent for August settlement fell as much as 35 US cents, or 0.7 per cent, to US$50.30 a barrel on the London-based ICE Futures Europe exchange.

The contract rose US$1.48, or 3 per cent, to US$50.65 a barrel on Monday. The global benchmark crude traded at a premium of 63 US cents to WTI for August.

BLOOMBERG