With British voters surprisingly voting to leave the EU, oil is likely to remain very volatile in the coming weeks. Notably, Britain’s exit means there’ll be a period of uncertainty over Europe’s future, casting a shadow over the market. Any reversal in the growth of trade and mobility is generally negative for the commodities, except gold. Following the Brexit vote, money will likely continue to flow into the U.S. dollar (safe haven) in the near term, which will continue to weight on oil prices. That said, when the Brexit hangover subsides, traders will no doubt again focus on the fundamentals of the oil market as the global crude surplus fades. They’ll also have to weigh any lasting impact from the U.K.’s decision on the world economy and oil demand. Despite Britain voting to leave the EU, oil market fundamentals have not changed, and the global oil market is still set to balance sometime in H2/16. If anything, this period of volatility following the Brexit vote should provide the oil bulls with some great buying opportunities......
A Canadian Energy expert