Volatility continues for crude oil prices, when benchmarks dropping below $50 per barrel on word of a truce brokered in OPEC-member Nigeria. File photo by Monika Graff/UPI | License Photo
NEW YORK, June 21 (UPI) -- Crude oil prices turned lower early Tuesday following a truce brokered with Nigerian oil bandits, amid pleas from the British prime minister to stay in the EU.
Crude oil prices in May rebounded sharply as outages from Canada and Nigeria threatened to upend a market moving back toward balance following at least two years of a tilt toward the supply side. Nigerian crude oil production is at multi-year lows because of militant threats, though Nigerian media reported a truce was brokered between the government and a group calling itself the Niger Delta Avengers.
Crude oil prices have been fluid as broader pressures ripple through financial markets because of concerns about a Thursday referendum on British membership in the European Union. Oil moved back above $50 per barrel Monday, after jumping 4 percent in Friday trading.
Prices shifted lower early Tuesday, however, following reports of the Nigerian truce. The price for Brent crude oil was down 1.9 percent to $49.70 per barrel. West Texas Intermediate, the U.S. benchmark price for oil, was down 1.8 percent to $49.07 per barrel.
Some momentum may be fueled by the expiring of July contracts for crude oil.
On the so-called Brexit, British Prime Minister David Cameron said Tuesday the referendum on the EU was a referendum on the regional economy.
"It will be stronger if we stay, it will be weaker if we leave," he said.
World markets have been influenced heavily by the potential outcome of the referendum. In mid-June, Angel Gurria, the secretary-general of the Organization for Economic Cooperation and Development, said if the British referendum passes, long-term growth for the European Union could be jeopardized.
More volatility could emerge later in the week after the U.S. Energy Information Administration releases weekly data on the domestic crude oil market. Preliminary analysis emailed from S&P Global Platts finds crude oil inventory levels could show a draw of around 1.4 million barrels as consumer demand for fuels rises in response to summer travel pressures.