Crude oil prices have dropped due to increasing worries about the UK’s possible exit from the European Union (EU).

Brent was 64 cents lower at $49.19 a barrel, while the US crude dropped 68 cents at $47.81 a barrel, Reuters reported.

Oil prices also fell following a rise in US inventories that left investors ignore the declaration by International Energy Agency (IEA) that the oil market is now in balance.

"If the UK votes to withdraw from the EU, investors fear the bloc may slip into recession."

IEA said that the oil market is balanced due to unplanned outages and demand, particularly from emerging economies.

Data revealed by the American Petroleum Institute highlighted an increase in US crude stocks by 1.2 million barrels to 536.7 million in the week ending 10 June.

If the UK votes to withdraw from the EU, investors fear the bloc may slip into recession, which may undermine oil demand.

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The UK withdrawing from the EU is dubbed ‘Brexit’ and emergency spending cuts and taxes are expected to increase if the country votes to leave.