Friday 24 June 2016 5:05 pm

The oil price has sunk as the Brexit vote casts uncertainty over financial stability and the future of the European Union

Oil prices have followed financial markets lower today as the market comes to terms with the increased uncertainty caused by the UK's unexpected vote to leave the European Union.

Oil fell sharply as the result of the referendum came in before recovering some ground.

A the London market close international benchmark Brent crude was down $2.18 at $48.73 a barrel, while US West Texas Intermediate was also $2.18 lower, at 47.93 a barrel.

So far this year oil prices are up more than 30 per cent as US shale producers go under. The rise of US shale in recent years has created a glut in the market after diminished former oil cartel Opec gave up trying to regulate supply in 2014.

The vote, which came in over night, sent the pound sharply lower against every other major currency and caused sell-offs around Asia.

Central bankers have already acted to stabilise markets, but many have indicated they may offer further support in coming months.

Ranko Berich, head of market analysis at Monex Europe, said:

The European Central Bank and Bank of Japan have been placed in dire straits by today’s events. Both economies are threatened by deflation that the ECB and BOJ have almost run out of ammunition in fighting, so today’s EUR uncertainty and JPY strength against the US dollar will prove extremely unwelcome.

Combined with today’s downturn in crude oil prices, we could see desperate action from the BOJ in particular, or perhaps even Shinzo Abe’s government. In the eurozone, we’re already seeing murmurs of other exit movements that are likely to create uncertainty about the union’s viability, and weigh on the single currency.

At the European open this morning stocks fell out of bed, with bank and construction stocks bearing the brunt of the panic selling.

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