Oil extended declines after falling to a one-week low as investors fled to haven assets including gold and the yen amid renewed concern the UK’s decision to leave the European Union will hinder global growth.
Futures fell as much as 1 percent in New York after tumbling 4.9 percent on Tuesday. Gold surged to a two-year high and the yen rose to its strongest level this month after Bank of England chief Mark Carney said risks from the UK’s vote had started to crystallize.
US inventories probably fell 2.5 million barrels last week, according to a Bloomberg survey before government data Thursday, which is delayed one day because of a holiday Monday in the US.
Crude has fluctuated roughly between $45 and $51 a barrel over the past month since almost doubling from a 12-year low in February as US producers slowly return drilling rigs.
Riskier assets are retreating again after rallying last week on bets central banks will work to stem the impact of the UK’s departure from the EU.
“Uncertainties and concerns over how Brexit will influence the market is expected to last for a long time, increasing volatility in oil prices,” Will Yun, commodities analyst at Hyundai Futures Corp. in Seoul, said by phone.
“Even when we see a decline in stockpiles in the US, it’s not strong enough to push prices up unless there are some major production cuts.”
West Texas Intermediate for August delivery fell as much as 45 cents to $46.15 a barrel on the New York Mercantile Exchange and was at $46.32 at 1:27 p.m. Seoul time.
Prices dropped $2.39 to settle at $46.60 on Tuesday, the lowest since June 27. The total volume traded was about 11 percent below the 100-day average.
Brent for September settlement lost as much 43 cents, or 0.9 percent, to $47.53 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude traded at a 70-cent premium to WTI for the same month.
The Bloomberg Dollar Spot Index, which tracks the currency against 10 major peers, rose for a second day to the highest intraday level in a week, making commodities more expensive for buyers in other currencies.
U.S. crude inventories in the week to June 24 dropped to 526.6 million barrels, the lowest since March 11, EIA data show. Supplies climbed to an 87-year high of 543.4 million barrels in the last week of April. Production has slipped by 55,000 barrels a day to 8.62 million, the lowest since September 2014, according to the latest report.