The world economic order has been shaken.
Oil prices are plummeting Friday morning after the UK on Thursday voted to leave the European Union, prompting fears of weaker economic growth and, consequently, weaker demand. And UK Prime Minister David Cameron said early morning U.S. time that he will step down by October.
Global markets were jolted at the results of the Brexit vote. The pound dropped to its lowest level against the dollar since 1985, and the FTSE 100 fell more than 8%, with banks were among the hardest hit. Oil prices plummeted- by more than 6%- as the UK’s departure raised concerns over a slowdown in demand brought on by an economic slowdown.
Brent was down $2.45 at $48.46/bbl. WTI was down $2.39 at $47.72/bbl. Earlier Friday, both benchmarks were down by more than 6% ($3), the largest intraday declines for both contracts since April 18. That was the day that the Doha output freeze meeting yielded nothing.
On Friday, BP said that, despite the vote, its headquarters would remain in the UK. “It is far too early to understand the detailed implications of this decision and uncertainty is never helpful for a business such as ours,” the company said in a statement.
As Mark Young wrote on Thursday, the CEOs of BP, Shell and Total earlier this week expressed support for the UK remaining in the EU. From Young’s report:
They featured in media outlets in a list of 1280 prominent business leaders urging the British public not to “Brexit”, together with executives from Centrica plc and smaller producers active in the UK such as EnQuest plc, ENGIE, MOL and BHP Billiton. Combined, the energy executives on the list of Remain supporters control approximately 510,000 boe/d of UK North Sea production.
Original Source: Jeff Reed