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US crude settles 1% lower at $48.01, down for 5th straight day

A Shell Oil facility in Carson, California
Mike Blake | Reuters
A Shell Oil facility in Carson, California

Oil prices fell on Wednesday, chalking up their fifth straight daily decline, as global markets slid on worries that Britain might leave the European Union.

Crude futures pared losses after U.S. government data showed a draw in crude stockpiles. They briefly clawed back back more ground after the Federal Reserve declined to raise interest rates before extending losses into U.S. crude's settlement.

U.S. crude's West Texas Intermediate ended Wednesday's session down 48 cents, or 1 percent, at $48.01.

Brent crude futures fell 96 cents, or 1.9 percent, cents at $48.87 a barrel, after trading as low as $48.67 earlier.

U.S. crude stockpiles fell by 933,000 barrels last week, the Energy Information Administration (EIA) said, less than half the 2.3 million-barrel draw anticipated by the market.

"It's a mixed bag," Chris Jarvis, analyst at Caprock Risk Management in Frederick, Maryland, said of the data.

The EIA also reported a bigger-than-expected drawdown in gasoline versus an unexpected build in distillates, which include diesel. U.S. oil production resumed its slide, falling by 29,000 barrels per day, after rising last week, EIA said.

"In short, this data 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 said.

Oil prices have declined for the four straight previous sessions, their longest such stretch since February. Crude is down more than 5 percent since hitting 2016 highs of nearly $53 a barrel on supply disruptions mostly out of Nigeria and Canada.

The dollar dipped against a basket of currencies, but remained close to its highest point since June 3, as investors worried that Britain could vote to leave the EU. A stronger dollar makes crude, priced in the U.S. currency, costlier in the euro and others.

A note by Goldman Sachs weighed on sentiment in oil, with the Wall Street firm saying crude needs to stay within $45-$50 to ensure a supply deficit in the second half of 2016.

Robust demand and production disruptions have helped balance the oil market but this equilibrium will again tip into surplus early in 2017, the International Energy Agency (IEA) said on Tuesday.

There is plenty of oil flowing into the market with Iran's exports on track to hit the highest in almost 4½ years in June, as shipments to Europe recover to near pre-sanctions level, a source with knowledge of the country's crude lifting plans has told Reuters.