Crude gains, Asia petchem shares mixed ahead of UK polls

SINGAPORE (ICIS)–Global oil prices were higher while shares of petrochemical companies in Asia were broadly mixed on Thursday, amid market jitters hours before the UK referendum on its EU membership begins.

Polling stations in the UK are set to open at 14:00 hours Singapore time (07:00 UK time, 06:00 GMT) on Thursday in a vote that will determine if the UK should remain or leave the 28-member EU trade bloc.

At 10:50 Singapore time (02:50 GMT), August Brent was up by 41 cents/bbl at $50.29/bbl, while August WTI was up by 45 cents/bbl at $49.58/bbl.

Both benchmarks settled lower in the previous session on worries that the UK will exit the EU – dubbed “Brexit” – and in response to a much smaller-than-expected drawdown in oil inventories in the US.

US crude stockpiles had a 1.7m drawdown last week, according to statistics from the US Energy Information Administration (EIA). It was the fifth consecutive weekly fall in crude inventories in the country.

In Japan, shares of petrochemical companies were higher in early trade on Thursday, with Asahi Kasei up 0.86%, Mitsubishi Chemical Holdings 1.27% higher and Mitsui Chemicals rising 1.04%, while the benchmark Nikkei 225 inched up 0.46% at 16,139.18.

In Hong Kong, Chinese chemical giant Sinopec was up by 0.29%, while oil and gas firm CNOOC fell 1.23%. The Hang Seng Index was up 0.40% at 20,878.45.

In South Korea, Lotte Chemical declined 1.58%, while SK Innovation fell 1.71%, in line with the KOSPI Index, which slipped 0.43% to 1,983.92.

In Malaysia, PETRONAS Chemicals Group (PCG) was down 0.62%, while in Thailand, polyester major Indorama Ventures Ltd (IVL) slumped 2.29%.

The UK vote is expected to draw in an estimated 46.5m participants on Thursday, with recent surveys showing a close call between the “Leave” and “Remain” vote, heightening financial markets volatility.

“The UK’s in-out referendum on its EU membership will be a pivotal point in the nation’s political and economic landscape,” said Commonwealth Bank of Australia in a note.

“The negative impact on GBP [British pound] and broader asset markets from a successful vote to leave the EU should far exceed the relief rally on the back of a “Bremain” vote,” it said.

Picture: Elizabeth Tower which houses Big Ben, London, Britain (Dinendra Haria/REX/Shutterstock)