Oil slumps after partial returns in UK indicate Brexit

24 Jun, 2016 8:53 am

TOKYO – Oil prices slumped more than 4 percent in Asian trading after results so far from a British referendum on European Union membership showed the “Leave” camp holding a lead.

US crude was down $2.40 at $47.71 a barrel at around 0314 GMT. Brent crude was down $2.39 at $48.52 a barrel.

On Thursday, both contracts rose sharply, rallying on optimism that Britons would vote to stay in Europe.

But as the early results flowed in from the vote, the dollar fell below 100 yen for the first time since November 2013, while the pound slumped, as carnage swept through markets.

“It’s like a rollercoaster ride in the markets right now, but it’s too early to tell which side is going to win,” said Bob Takai, president at Sumitomo Corp Global Research.

Financial markets have been racked for months by worries about what Brexit, or a British exit from the European Union, would mean for Europe’s stability.

Early opinion polls showed the ‘Remain’ camp in the lead, perhaps giving markets a false sense of complacency. An Ipsos MORI poll put the lead at 8 points while a YouGov poll out just after polls closed found 52 percent of respondents said they voted to remain in the EU while 48 percent voted to leave.

But with results declared from 206 of 382 voting districts plus parts of Northern Ireland, ‘Leave’ was ahead by 51.3 percent to 48.7 in the referendum.

A vote to break with Europe could usher in deep uncertainty over trade and investment and fuel the rise of anti-EU movements across the continent.

Sterling fell by the most in living memory, down 10 percent. It was last at around $1.37. The euro fell to around $1.11 while the dollar fell to as low as 99.08 yen. -Reuters

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