Holiday, Brexit cloud, pull oil prices lower

Holiday-Brexit-cloud-pull-oil-prices-lower.  NEW YORK,  Light trading ahead of a long U.S. holiday and lingering concerns about the prospects for the British and European economies pulled oil slightly lower Friday.

Crude oil prices down slightly on light-trading day after European Central Bank official says Brexit may drag on future growth. File photo by Monika Graff/UPI | License Photo

Global markets found some relief Thursday after the Bank of England said some short-term stimulus was possible in the wake of the economic panic that followed last week’s vote to leave the European Union.

In a speech, Bank of England Governor Mark Carney said uncertainty about the so-called Brexit could drag on economic growth for some time.

“While some of the necessary adjustments may prove difficult and many will take time, the transition from the initial shock to the restructuring and then building of the U.K. economy will be much easier because of our solid policy frameworks,” he said.

Speaking in London, Peter Praet, a member of the executive board at the European Central Bank, said the regional economy was moving into uncharted territory in the wake of the British referendum.

“Such uncertainty may weigh on economic confidence and partly reverse the recent improvements in investment and consumption, also in the euro area,” he said Friday.

Crude oil prices had been volatile in intra-day trading, but trending lower by the start of trading in New York. The price for Brent crude oil was down 0.5 percent to open at $49.48 per barrel. West Texas Intermediate, the U.S. benchmark, was off 0.3 percentto start the day at $48.18 per barrel.

Trading was light Friday as U.S. holiday-goers prepared for a three-day weekend to mark Independence Day.

Crude oil prices have recovered from below $30 per barrel as some modest economic recovery, and lower consumer fuel prices, spurs demand. A report this week from ING Bank found that, at around $50 per barrel, crude oil may have reached a short-term ceiling.

A report from Barclays, published in part through The Wall Street Journal, said global demand for oil softens next year by more than 7 percent to around 1.2 million barrels per day. The British referendum, the bank said, was “another nail to the coffin for global oil demand in 2016.”

By Daniel J. Graeber