Crude oil prices took a positive turn in early Asia trade Friday, pushed by bargain-hunting and speculative trades, but the warning’s that suspense around U.K.’s future in the European Union is still spooking investors. U.S. crude for July delivery (+1.38%) was up $0.29 or 0.6% at $46.50 a barrel on the New York Mercantile Exchange, after posting its largest one-day loss since April overnight, the global benchmark was last up $0.41 cents or 0.9% at $47.60 a barrel. It has dropped nearly 6% week-to-date.
Some analysts said the latest buying could also be speculative as some traders are betting the referendum to fail.
However, the short term outlook for the oil market remains hazy as supply outages, the main driver for the recent price rally, are winding down. Canada has restarted a bulk of its oil operation after the recent wildfires. U.S. oil rig counts have also increased for two weeks in a row. Industry group Baker Hughes is expected to release the weekly rig count later today.
The International Energy Agency has also cautioned of a larger-than-expected global inventory overhang and said a rebalance won’t be seen until second half of next year. It forecasts non-OPEC supply to rise 200,000 barrels a day in 2017.
Deepening concerns over global economic growth are likely to keep commodity markets on the back foot despite falling inventories and ongoing supply issues in many markets..