Crude Prices Collapse

Crude Prices CollapseCrude Prices Collapse

Oil prices tumbled by more than 6% on Friday after Britain voted to leave the European Union, raising fears of a broader economic slowdown that could reduce demand.

Brent crude was down 4.85% or $2.47 at $48.44 a barrel. US crude was down 4.6% or $2.31 at $47.80 a barrel, Reuters reported.

Earlier in the day, both contracts were down by more than $3, or over 6%, the biggest intra-day declines for both since April 18, when a meeting of top global oil producers failed to agree on an output freeze.

Financial markets have been worried for months about what Brexit, or a British exit from the European Union, would mean for Europe’s future, but were clearly not fully factoring in the risk of a leave vote.

Some analysts said oil could face further downward pressure.

“Our view is that we have not yet seen the low oil price of the day with Brent likely to trade down towards $45 or lower before we have seen the worst of it,” Bjarne Schieldrop, chief commodity analyst at SEB, said in note to clients.

“Higher risk aversion is likely to make it hard for prices to regain the $50 per barrel mark in anything like the near future,” said Commerzbank analyst Carsten Fritsch.

BP said on Friday its headquarters would remain in the United Kingdom, despite the vote.

The vote to break with Europe is set to usher in deep uncertainty over trade and investments.