Oil swings on UK vote amid weekly gain on sliding US supply

[HONG KONG] Oil fluctuated as investors await the outcome of the UK. vote on whether to remain in the European Union as prices headed for the biggest weekly advance in two months after US stockpiles and production declined.

Futures swung between gains and losses in New York after closing 2 per cent higher Thursday. US output fell to the lowest level since September 2014 while inventories dropped for a fifth week through June 17, according to government data on Wednesday.

Early opinion polls reinforced speculation that voters in the UK referendum, known as Brexit, chose to remain a member of the EU.

Oil has fluctuated the past week as uncertainty about the outcome of the UK. vote drives volatility in global markets. Crude in New York has advanced about 90 per cent from the lowest level in 12 years in February as disruptions from Nigeria to Canada and falling output in the US eased a global surplus.

West Texas Intermediate for August delivery fell 25 cents, or 0.5 per cent, to US$49.86 a barrel on the New York Mercantile Exchange at 7:27 am Hong Kong time. The contract gained 98 US cents to US$50.11 on Thursday. Total volume traded was about 28 per cent below the 100-day average. Prices are up 3.9 per cent this week.

Brent for August settlement rose US$1.03, or 2.1 per cent, to US$50.91 a barrel on the London-based ICE Futures Europe exchange on Thursday. Prices are up 3.5 per cent this week. The global benchmark crude ended the session at a premium of 80 US cents to WTI.

BLOOMBERG