Oil market jumps on output woes in Canada, Libya
Oil prices rallied Thursday with Brent breaching $45 a barrel on worries over output from Canada and Libya, while traders reacted also to falling US production.
Approaching 1700 GMT, New York’s West Texas Intermediate (WTI) for delivery in June was up $1 at $44.78 per barrel.
European benchmark Brent crude for July delivery jumped 82 cents to $45.44 compared with Wednesday’s close.
“Oil prices are rising today after three consecutive lower closes,” said analyst David Cheetham at London-based brokerage XTB.
“Firstly, a huge wildfire — which has forced the evacuation of 88,000 people in the western Canadian oil city of Fort McMurray — has seen some pipelines in the region being shut and disruptions to output at several facilities,” Cheetham told AFP.
“On top of that a political stand-off in Libya which prevented a Glencore cargo from loading raises concerns about… levels of output.”
Cheetham added: “In the grand scheme of things both these developments are unlikely to be significant driving factors for the market going forward, but the timing coinciding with some short term oversold conditions has seen the price move higher so far today.”
Authorities say wildfires are burning out of control in the Alberta oil sands region of Canada, which mines and ships heavy crude to the US, and oil companies have reduced operations as non-essential employees are evacuated.
“Prices (are) supported today by an on-going wildfire in Alberta’s oil sands region, presenting a bullish risk for Canadian production,” added Inenco analyst Dorian Lucas.