Oil flips to gains in Europe, volatility set to remain

Oil benchmarks on both sides of Atlantic reversed course as we head into the European session, inching higher on the back profit-taking after the recent downward spiral triggered by Brexit.

Oil awaits weekly supply reports

Currently, both crude benchmarks are heading higher, with Brent up +0.88% at $49.47, while WTI rises +0.63% to $ 48 mark. Oil prices turned positive this session, erasing losses seen almost throughout the Asian hours, as markets resorted to taking profits off the table after the Brexit decision last Friday triggered a sharp sell-off in global markets.

Earlier on the day, oil prices weakened further after the pound fell dived deeper into losses as traders remain wary about the impact of a Brexit on the overall market sentiment.

However, any recovery is likely to be short-lived on the back of oversupply worries, China demand concerns, the macro outlook, and the likely return of production, as rightly noted by Morgan Stanley.

Further, oil markets also eagerly await the weekly crude supply reports from the US for fresh insights on supply scenario.