Investing.com - Oil prices were under pressure in North American trade on Tuesday, dropping to the lowest level in almost two weeks on worries Britain may leave the European Union in a referendum less than 10 days away.
Recent polls suggested support for the U.K. campaign to leave the European Union is picking up. Britain's "Out" campaign widened its lead over the "In" camp ahead of the country's June 23 referendum, according to two opinion polls published by ICM on Monday.
A vote by Britain to leave the European Union may tip Europe back into recession, putting more pressure on the global economy.
On the ICE Futures Exchange in London, Brent oil for August delivery fell to an intraday low of $49.50 a barrel, a level not seen since June 3. It last traded at $49.98 by 13:35GMT, or 9:35AM ET, down 37 cents, or 0.73%.
A day earlier, London-traded Brent slumped 19 cents, or 0.38%. Brent futures prices are still up by roughly 90% since briefly dropping below $30 a barrel in mid-February as unplanned supply disruptions in Africa eased concerns over a global glut.
The International Energy Agency raised its 2016 global oil demand forecast in its monthly market report published Tuesday. Global oil demand will increase by 1.3 million barrels a day this year, up from 1.2 million barrels projected a month earlier.
The Paris-based organization said that the outages in OPEC and non-OPEC countries cut global oil supply by nearly 800,000 barrels a day in May, the first significant drop since early 2013, due mostly to reduced output in Canada and Nigeria.
Elsewhere, crude oil for July delivery on the New York Mercantile Exchange dropped 30 cents, or 0.61%, to trade at $48.58 a barrel after falling to a session low of $48.02 a barrel, the weakest level June 2.
On Monday, New York-traded oil prices shed 19 cents, or 0.39%, after industry group Genscape reported an increase of 525,000 barrels at the Cushing, Oklahoma delivery point for WTI futures during the week to June 10.
Market players now looked ahead to fresh weekly information on U.S. stockpiles of crude and refined products. The American Petroleum Institute will release its inventories report later in the day, while Wednesday’s government report could show crude stockpiles fell by 2.3 million barrels in the week ended June 10.
U.S. crude futures are up nearly 85% since falling to 13-year lows at $26.05 on February 11 as a decline in U.S. shale production boosted sentiment. However, with prices now at levels that make drilling economical for some firms, the rig count might start rising soon and the decline in U.S. production may slow.
According to oilfield services provider Baker Hughes, the number of rigs drilling for oil in the U.S. increased by three last week to 328, the second straight weekly rise.
The renewed gain in U.S. drilling activity fueled speculation that domestic production could be on the verge of rebounding in the weeks ahead, underlining worries over a supply glut.
Meanwhile, Brent's premium to the WTI crude contract stood at $1.40 a barrel, compared to a gap of $1.47 by close of trade on Monday.