Oil Bounces Back from Lows after Brexit Losses

Oil prices saw a modest rebound on bargain hunting in Asia on Monday, despite uncertainty gripping the markets following last week's decision by Britain to leave the European Union.

Global markets took a beating on Friday, with some $2.1 trillion wiped off valuations and the British pound plunging to 31-year lows against the dollar, while oil prices slumped more than five percent.

After sliding further on Monday morning, crude rebounded in early afternoon trade in Asia as traders piled back in.

"Policy makers in Europe are now trying to calm the market after last week's volatility," CMC Markets trader Alex Wijaya told Agence France Presse.

"Be it equities, forex or commodities, the fundamentals still haven't changed, and it's sentiments about Brexit that are driving the market," he said.

British finance minister George Osborne said early Monday that Brexit was likely to lead to further volatility but the British economy is "as strong as could be".

At about 0700 GMT, US benchmark West Texas Intermediate was up seven cents, or 0.15 percent to $47.71 while Brent was up 23 cents, or 0.48 percent, to $48.64.

Both contracts have tumbled almost 10 percent from their 2016 highs touched earlier this month.

"While the oil market fundamentals will ensure no major drop in the price of crude... the oil markets are likely to remain under pressure until the volatility in the financial markets comes down," said EY Services oil and gas analyst Sanjeev Gupta.

"Everything is caught up in Brexit," Evan Lucas, a market strategist at IG Ltd. in Melbourne told Bloomberg News.

"The oil fundamentals for the moment will be put to one side as markets try to figure out exactly how this will all work," he added.

Adding to the downward pressure on crude was the strengthening of the dollar, with traders fleeing to the currency's relative safety.

A stronger dollar makes dollar-priced commodities like oil more expensive for those using other currencies.