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Brexit could cause $5 drop in oil price: Analyst – Kuwait oil down to $43.38 pb

KUWAIT: A local oil analyst expected on Friday that UK’s exit from the EU may cause a five dollar drop in the price of a barrel of oil in international markets, from $60 to $55 for the benchmark Brent crude. The price of Kuwaiti oil went down Friday by $1.17 to settle at $43.38 per barrel after being at $44.55 pb the day before, Kuwait Petroleum Corporation (KPC) said yesterday.

The exit may also cause the Kuwaiti oil price to average about $47 a barrel for the rest of 2016, said oil analyst Abdul-Samiea Behbehani, in remarks in the wake of the jolting Brexit vote. He expected that UK’s exit from the EU would eventually have negative ramifications for oil prices during the remainder of the year and possibly next year.

The earlier expectation for ramping up of oil prices for the remainder of the year tanked completely by today’s results of the Brexit vote, he said, expecting that average prices for Brent crude would drop from $60 to $55 and average prices for Kuwaiti crude would hover around $47, a drop from former expectations of $52.

Further he said that UK’s pullout of the EU was likely to boost speculative trading in oil markets during the second half of the year as the UK would cause anxiety in these markets for the duration of its long negotiations with the EU over its pullout. — KUNA

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