Stock market experts would know that trading stocks online is often influenced by political factors. Outgoing British Prime Minister David Cameron has often been targeted as the man behind the various factors that led to this controversial Brexit referendum resulting in a slender majority voting for Britain leaving the European Union. This was despite the fact that Cameron had always voiced his intention for the country to remain in the EU. Many, including those within his party, however, felt that Cameron's opinions weren't heartfelt.
New Oil Crises to Take Attention off Brexit
While the immediate aftermath of the Brexit results caused stock markets to experience declines the world over and the dollar to sink to its lowest in 31 years, the shocks have subsided now as a new phenomenon vied for attention. Oil prices have risen on the back of a Norwegian strike and the Venezuelan oil crisis.
After the initial Brexit shock, financial traders have poured back money into the commodities. This made oil prices rise with Brent crude futures trading per barrel at $48.95. This was a 37-cent increase from their previous settlement. US crude had also climbed to $48.29 per barrel, a 44-cent increase. Both the oil benchmarks were able to gain on Tuesday as the markets were able to shake off a bit of the Brexit shock caused by most voters choosing to exit the European Union.
The commodities sector was led by oil. News of the rapidly declining oil output in Venezuela, and a strike in Norway that could potentially impact production, helped solidify the oil gains. The strike threatens to cut the output from the largest oil producer in the North Sea.
Oil Prices Could Rise to Previous Level
According to Standard Chartered, oil prices could quickly return to the earlier rates of $50 per barrel after the fall caused by the results of the referendum, since their impact on oil demand is limited. Venezuela is in the midst of a crisis, with oil refiners and producers struggling to maintain the output because of shortages in equipment and frequent power cuts. The American Petroleum Institute (API) revealed that the US crude inventories also reduced by 3.9 million barrels, significantly more than the 2.4 million barrels that analysts expected, in the week leading up to June 24.
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