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U.S. oil falls to 3-wk low on inventory gains, Brexit fears

Published 15/06/2016, 10:43 am
© Reuters.  U.S. oil falls to 3-wk low on inventory gains, Brexit fears
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TOKYO, June 15 (Reuters) - Crude futures fell in early Asian trade on Wednesday as mounting concerns about Britain's possible exit from the European Union and a surprise build in U.S. inventories left investors ignoring the IEA's declaration that the oil market is now in balance.

U.S. crude CLc1 fell to a three-week low as the contract dropped for a fifth day. It was trading down 68 cents at $47.81 a barrel at 0034 GMT.

Brent LCOc1 was also down for a fifth day to hit its lowest in around two weeks. The global benchmark was 64 cents lower at $49.19 a barrel.

Data from the American Petroleum Institute showed U.S. crude inventories rose by 1.2 million barrels in the week to June 10 to 536.7 million, compared with analyst expectations for a decrease of 2.3 million barrels. API/S

But the impending vote on the so-called Brexit is dominating everything from currency markets to German Bunds, yields of which fell below zero for the first time on Tuesday after new polls showed the leave campaign is gaining over the "In" camp.

The influential Sun newspaper, long a scourge of alleged European Union excess, also came out in support of Britain leaving the EU.

If Britain voted to exit the EU, investors fear the bloc could slip into recession, which in turn could undermine oil demand.

The oil market is now in balance thanks to unplanned outages and robust demand, particularly from emerging economies, but this equilibrium will tilt into surplus again early next year, the International Energy Agency said on Tuesday. there is plenty of oil flowing into the market with Iran's exports on track to hit the highest in almost 4-1/2 years in June, as shipments to Europe recover to near pre-sanctions level, a source with knowledge of the country's crude lifting plans has told Reuters.

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