Experts: Brexit aftermath may stem oil recovery

After three months of raising oil-price forecasts, analysts say the UK vote to leave the European Union (Brexit) could crimp crude demand and weigh on prices next year.

A survey of 14 investment banks by The Wall Street Journal sees Brent crude, the international oil-price benchmark, averaging $57 a barrel in 2017, broadly unchanged from the survey in May. The banks expect West Texas Intermediate (WTI) to average $55 a barrel next year.

Oil prices are up more than 65% since earlier this year, when they hit lows of more than a decade on a global glut, as a spate of production outages dented supply and U.S. production declined.

Analysts said Britain’s referendum outcome could derail that recovery. Investors are concerned about the effect of the vote on the UK and eurozone economies and the uncertainty that it introduces across the world.

Crude is down about 10% since the referendum, as investors have fled risky assets such as commodities.