By Miriam Malek and Jenny Hsu 

Oil prices edged higher on Monday as global trading reopened for the week following the U.K.'s unexpected decision to leave the European Union on Friday.

The global benchmark, Brent, was trading up 0.4% at $48.59 a barrel. Its U.S. counterpart, West Texas Intermediate, was trading up 0.3% at $47.80 a barrel.

Oil prices plunged by nearly 7% at one point on Friday as Britain's decision to exit the EU, known as "Brexit," surprised investors, triggering a selling spree across global markets.

The volatility is likely to remain over the near term, as the pound fell further on Monday and sent the U.S. dollar soaring. A stronger greenback makes oil more expensive for traders using other currencies, typically pushing prices down. But most analysts agree that strong oil market fundamentals are likely to limit losses to prices.

The U.K.'s vote to leave the EU will likely have only a minor impact on global oil supply and demand since Britain accounts for less than 2% of the world's oil demand. Still, the move has shaken investor confidence in the region's economic growth, with some fearing it could lead to a copycat reaction in other EU members.

A potential slowdown in investment could mean less regional output, which would narrow the supply and demand gap in oil.

"On a positive note, the vote could delay producers' investment plans, making them hesitant to bring back investment even with a bounce in prices, especially in the U.S.," said Morgan Stanley in a note.

The bank said the most crucial factors in oil are still refined products supply, China demand, and the macroeconomic outlook.

In Asia, refining margins have collapsed because of a glut of refined products pumping out of China. But one analyst suggested that demand would remain fundamentally strong.

"The thing is people will continue to drive their cars and they will still need fuel during the winters," said Aaron Lynch, an analyst at optionsXpress.

On Friday, the number of active rigs digging for oil in the U.S. fell for the first time in four weeks, according to data by industry group Baker Hughes Inc.

The news is a reversal in a recent trend that saw rigs recovering. A decline suggests U.S. producers may not be as quick to return to the market as many analysts thought.

Write to Miriam Malek at Miriam.Malek@wsj.com and Jenny Hsu at jenny.hsu@wsj.com

(END) Dow Jones Newswires

June 27, 2016 05:38 ET (09:38 GMT)

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