By Devika Krishna Kumar
NEW YORK (Reuters) - Oil prices fell 1 percent on Tuesday, down for a fourth straight day, pressured by investor nervousness over Britain's vote next week on whether to leave the European Union, which overshadowed signs of a return to fundamental balance for crude markets.
Safe-haven German Bund yields (DE10YT=RR) fell below zero for the first time, while industrial commodities and equity markets, seen as more vulnerable to economic risk, dropped after polls showed Britain's "Leave" campaign leading ahead of the June 23 vote on EU membership.
The referendum-related concerns eclipsed an upbeat forecast for oil demand growth from the International Energy Agency, which said the oil market is essentially balanced after two years of surpluses. [IEA/M] On Monday, OPEC forecast that the oil market would be more balanced in the second half of 2016 as outages in Nigeria and Canada help to speed erosion of a supply glut.
Brent crude oil futures (LCOc1) fell 64 cents to $49.71 a barrel by 11:49 a.m. EDT (1549 GMT), while U.S. crude futures (CLc1) lost 47 cents to $48.41 a barrel.
"Even as both OPEC and the International Energy Agency talk about a tighter oil market, fear of the fallout from a UK exit from the euro zone is throwing global markets into a tizzy," said Phil Flynn, an analyst at Price Futures Group in Chicago.
The campaign for Britain to leave the EU has a "significant lead" ahead of the referendum, according to a poll from TNS. Some 47 percent of likely voters said they will opt to leave the EU, compared with 40 percent who want to stay, according to the poll of 2,497 people.
"This (the referendum) has rattled a lot of financial and commodity trader/investors with money seemingly starting to flow to the so-called safe-haven U.S. dollar until the dust settles and the voting is concluded," said Dominick Chirichella, senior partner at the Energy Management Institute in New York.
"The strong U.S. dollar versus most currency pairs is a negative price directional driver for the oil complex."
If Britain voted to leave the EU, a prospect dubbed "Brexit", investors fear the bloc could slip into recession, which in turn could undermine oil demand.
The dollar (DXY) has risen about 1.5 percent from its June lows against a basket of currencies, spurred by Brexit fears.
Reflecting this extreme nervousness, volatility in the pound
Adding to the uncertainty in the markets was the ongoing two-day U.S. central bank meeting.
"Not increasing interest rates would be interpreted as the U.S. economy is not healthy enough for increasing interest rates," a U.S. trader said.