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Oil slips on modest US draw; market swings seen pre-UK vote

U.S. gasoline demand over past four weeks rose 3.9 percent year-on-year, but stocks of the motor fuel rose 627,000 barrels last week, while distillates grew 151,000 barrels.

Crude prices had moved higher earlier in the session on optimism Britain will elect to “Remain” in the EU, and investors braced more market swings as the dollar gyrates on speculation over the referendum. The greenback determines demand for dollar-denominated oil among holders other currencies when other fundamental factors are less compelling.

“Though some may be forgiven for thinking that the outcome is a foregone conclusion, the inconsistency between the betting money and the polls mean that conditions are ripe for a fresh bout of volatility,” said Stephen Brennock of oil broker PVM.

Aside from moving on the British vote speculation, the dollar weakened on Wednesday against a basket of currencies after cautious comments on the U.S. economy by Federal Reserve Chair Janet Yellen, who virtually ruled out a July interest rate hike.

In other industry news, top crude exporter Saudi Arabia said it may reprise its role of balancing supply and demand once the global market for oil recovers.

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