Tue, May 10 2016, 06:00 GMT Bloomberg
Crude traded near a two-week closing low as wildfires in Canada moved away from the main oil-sands facilities, reducing the likelihood of a long period of reduced production levels.
Futures fell as much as 0.6 per cent in New York. The wildfires led to cuts equivalent to about 1 million barrels a day, or 40 per cent of the region’s production, based on IHS Energy estimates. A shift in winds away from the facilities and cooler weather limited damage to producers.
Once fires in Alberta are under control, the majority of oil sands mining projects could be back to normal production levels in about a week, Morgan Stanley said.
Oil has rebounded after slumping to the lowest level since 2003 earlier this year amid signs the global oversupply will ease as US output declines. While American production has dropped, the Organization of Petroleum Exporting Countries has boosted supply to more than 33 million barrels a day, underpinned by gains from Iran and Iraq.
West Texas Intermediate for June delivery fell as much as 25 US cents to US$43.19 a barrel onthe New York Mercantile Exchange and was at US$43.24 at 7:28 am Tokyo time.
The contract dropped US$1.22 to close at US$43.44 on Monday, the lowest in two weeks. Total volume traded was about 65 per cent below the 100-day average.
Brent for July settlement slipped US$1.74 to end the session at US$43.63 a barrel on the London-based ICE Futures Europe exchange on Monday. WTI for July closed at a 40-US-cent premium to Brent.
Saudi Arabia, the world’s largest crude exporter, replaced its oil minister Ali al-Naimi over the weekend with the chairman of state energy company Saudi Arabian Oil Co Khalid Al-Falih.
Speaking in January at the World Economic Forum in Davos, Mr Al- Falih indicated that Saudi Arabia plans to act vigorously to defend its market share and exports as the market re-balances.