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Crude dips to 5-week lows as oversupply, Brexit concerns fester - -- Crude futures fell sharply on Thursday, slumping to their lowest levels in five weeks amid a surging dollar, continuing fears of global oversupply and mounting Brexit concerns.

On the New York Mercantile Exchange, WTI crude for July delivery traded between $46.16 and $47.75 a barrel before closing at $46.20, down 1.78 or 3.71% on the session. On the Intercontinental Exchange (ICE), brent crude for August delivery wavered between $47.09 and $48.76 a barrel, before settling at $47.21, down 1.76 or 3.59% on the day. Both the international and U.S. benchmarks are down approximately 10% from multi-month highs earlier this month.

As the dollar soared to two-week highs on Thursday, WTI crude closed lower for the sixth straight session, dropping to its lowest level since mid-May. It came as implied volatility on the British pound hovered near all-time highs, amid escalating fears of a U.K. departure from the European Union at a controversial referendum next week. While leaving its bank rate steady at 0.5% on Thursday morning, the Bank of England also issued stark warnings on the consequences of a Brexit on domestic and global financial markets. But as the pound sterling eased off lows at the close of euro area markets, the dollar pared earlier gains helping trigger a rally in oil prices . Crude futures then retreated again in the final hour of trade, closing near session-lows.

The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, soared to an intraday-high of 95.53, before falling back to 94.90, up 0.25% on the session. The index is still down by more than 5% since early-December. Dollar-denominated commodities such as crude become more expensive for foreign purchasers when the dollar appreciates.

Energy traders also digested a lower than expected U.S. crude inventory draw last week when U.S. commercial crude oil inventories decreased by 0.9 million barrels for the week ending on June 10. At 531.5 million barrels, U.S. crude oil inventories are at historically high levels for this time of year. While analysts initially expected a draw of 2.3 million barrels, they lowered their expectations following reports of a 1.518 million build by the American Petroleum Institute on Tuesday evening after the close of trading.

Elsewhere, investors kept a close eye on the escalating crisis in Venezuela, after 400 people were arrested on Wednesday night for looting in Caracas. Scores of residents in Venezuela have been placed under arrest in recent weeks for raiding supermarkets, amid food shortages in necessities such as flour and rice. It came as U.S. Secretary of State John Kerry backed international calls for Venezuela president Nicolas Maduro to honor a referendum allowing a recall vote that could force him from power. In May, Venezuela's crude production fell by 120,000 barrels per day, suffering its strongest month-on-month decline in 13 years.

Meanwhile, the NASDAQ Composite index and S&P 500 Composite index were slightly lower on Thursday afternoon, on pace for their sixth straight loss. In addition, yields on the U.S. 10-Year fell as low as 1.518%, their lowest level in four years. The CBOE Vix Volatility Index rose by more than 1 point to an intraday-high of 22.77, its highest level in four months. The Vix is up approximately 45% this week, on pace for its strongest weekly gain since January.

Since falling to 13-year lows at $26.05 a barrel on February 11, WTI crude has rallied by more than 80%. Despite the recent upswing, oil prices are still down more than 50% from their peak of $115 a barrel two years ago. offers an extensive set of professional tools for the financial markets.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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