Oil drops on growing demand concerns, Brent below $ 50

Oil benchmarks on both sides of Atlantic fell in the Asian trades this Tuesday, extending its downside momentum for the second straight session, as demand concerns resurface amid Brexit-led uncertainty and panic in the markets.

Brent drops below $ 50 mark

Currently, both crude benchmarks trade deep in red, with Brent down -1.10% at $49.56, while WTI dips -1.70% to $ 48.16 levels. The black gold extends its bearish run as looming global growth concerns reinforced by the Brexit decision weighs down on the demand for oil and hence, dragged the prices lower.

Analysts at Barclays noted, "The deterioration in the global economic outlook, financial market uncertainty and ripple effects on key areas of oil demand growth are likely to exacerbate already-lacklustre industrial demand growth trends. The dire warnings about the effect on global financial markets and risk appetite from a UK vote to leave the EU are yet to manifest themselves in commodity markets, which in general have performed robustly over the past week."

While persistent broad based US dollar strength also adds to the selling pressure seen behind the black gold. Meanwhile, the USD index edges +0.10% higher at 95.72. A weaker greenback makes the dollar priced-in commodity cheaper for holders in other currencies.

Looking ahead, focus remains on the API crude stockpiles report due on Wednesday ahead of FOMC minutes, which set a fresh direction in the greenback, eventually impacting oil.