Oil Erases Brexit Selloff as US Crude Supplies, Dollar Decline

(Bloomberg) - Oil erased the two-day plunge that followed Britain’s vote to leave the European Union after U.S. crude inventories dropped for a sixth week while the dollar retreated against its peers.

Futures advanced 4.2 percent in New York, extending Tuesday’s 3.3 percent increase. Crude supplies declined 4.05 million barrels last week, the Energy Information Administration said. The dollar fell amid speculation policy makers will take action to limit damage from the U.K.’s secession from the EU. A weaker dollar boosts investor demand for commodities.

Crude has climbed more than 80 percent from the lowest level in 12 years in February as global supply disruptions and falling U.S. output reduce a surplus. Even as the world waits to see how the June 23 Brexit referendum plays out, oil demand is expected to continue growing as U.S. vacationers take to the road. Futures dropped 7.5 percent in the two days following the vote, the biggest decline since February.

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