Oil plunges more than 6.0% as Brexit looms

SINGAPORE - World oil prices plunged more than 6.0 per cent in Asia Friday after early results of a historic vote showed Britain increasingly moving towards bolting out of the European Union.

US benchmark West Texas Intermediate for delivery in August was down US$3.11, or 6.21 per cent, at US$47.00 at around 0357 GMT. Brent crude for August was down US$3.14, or 6.17 per cent, at US$47.77.

Prices remain volatile as global financial markets are on tenterhooks over the vote, which analysts say could have severe repercussions well beyond Britain.

Forecasts by the BBC, ITV and Sky News with almost all the results counted showed that Britain has voted to leave the EU.

With 304 out of 382 results counted, Brexit was ahead at 52 per cent following Thursday's referendum.

Several world leaders have warned that a British exit, or Brexit, of the EU would lead to a recession with global spillover effects.

"Now is the time of the extreme volatility... a vote for Brexit, could bring a big tail risk to the market," said CMC Markets analyst Margaret Yang.

"That is exactly why banks and brokerage firms have been on the alert, anticipating the risks and impacts that Brexit could bring to the market." Bernard Aw, an analyst with IG Markets in Singapore, said part of the reason for the plunge in oil prices was the strengthening of the dollar, which is seen as a safe haven in times of uncertainty.

A strong greenback makes dollar-priced oil more expensive for holders of other currencies, dampening demand and hurting prices.

"There's a possibility that oil may fall more after the full results are out since we've already seen quite a plunge in the pound," Aw told AFP.