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June 15, 2016

Oil price drop caused by Brexit fears

Oil prices have experienced a further fall amid worries that the UK might vote to exit the EU next week, while the US Federal Reserve has indicated its plans to two rate increases.

Oil prices have experienced a further fall amid worries that the UK might vote to exit the EU next week, while the US Federal Reserve has indicated its plans to two rate increases.

Brent crude futures’ front-month LCOc1 saw a fall of 86 cents to $48.97 per barrel, while the front-month of US crude’s West Texas Intermediate (WTI) futures CLc1 dropped by 48 cents to reach $48.01 a barrel, reported Reuters.

According to Goldman Sachs, a barrel of crude will have to sell at $45-$50 for the market to see a deficit in supply in the second half of this year.

"UK polls are currently putting an EU exit ahead."

In the last few days, oil prices have been steadily dropping, losing around 7%.

A week ago, the price of Brent reached its highest level in 2016 at $53 a barrel due to supply disruptions, pimarily in Canada.

UK polls are currently putting an EU exit ahead.

Even though the US Federal Reserve did not change interest rates in June, it reduced forecasts of economic growth for this year and next year. However, it still indicated on making two rate increases in 2016.

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