Oil prices dropped for a fourth day on Tuesday, June 14 following the rising fears of investors over next week’s vote on Britain’s possible European Union exit, which overshadowed signs of a return to health for crude prices.
Brent crude oil futures LCOc1 shed 61 cents to $49.74 a barrel by 1300 GMT, dropping for a fourth day in a row.
On the other hand, U.S. crude futures CLc1 lost 38 cents to $48.50 a barrel.
Safe-haven German Bund yields DE10YT=RR fell below zero for the first time while industrial commodities and equity markets, seen as more vulnerable to economic risk, dropped after polls showed Britain’s “Leave” campaign leading before a referendum on EU membership..
This overshadowed a more upbeat forecast for oil demand growth from the International Energy Agency, which said the oil market is essentially balanced after two years of surpluses. [IEA/M]
Commerzbank analysts said in a note:“Stock markets are under pressure … and yields on 10-year German government bonds have slipped into negative territory today for the first time.”
“Oil prices are unable to ignore this negative market sentiment, especially since the majority of speculative financial investors are continuing to bet on climbing oil prices.”