Oil prices hit fresh highs, nears $50/bbl as Canada wildfires rage on

Prices have shot up after US banking giant Goldman Sachs this week said that supply disruptions in Africa's biggest oil producer Nigeria -- along with better demand -- had created a surprising short-term supply deficit

AFP May 18, 2016 13:27:49 IST
Oil prices hit fresh highs, nears $50/bbl as Canada wildfires rage on

Singapore: Crude oil hit fresh 2016 highs in its march toward $50 in Asia today, fanned by escalating wildfires in Canada's oil sands region and hopes of an easing in the oversupply.

Oil prices hit fresh highs nears 50bbl as Canada wildfires rage on

Prices have shot up after US banking giant Goldman Sachs this week said that supply disruptions in Africa's biggest oil producer Nigeria -- along with better demand -- had created a surprising short-term supply deficit.

It described the situation in Nigeria as "systemic" and production in that country is likely to remain curtailed for
the rest of the year.

At about 0930 IST, US benchmark West Texas Intermediate (WTI) for June delivery rose 14 cents, or 0.29 percent, to $48.45 a barrel. Brent for July delivery climbed eight cents, or 0.16 percent to $49.36.

Both contracts closed higher yesterday, with the WTI settling at $48.31, its highest since early October.

IG Markets analyst Bernard Aw said traders are feeling "more bullish" following the Goldman Sachs report.

"Based on the report, the demand has started to outstrip supply. Sentiment is picking up quite a bit and perhaps prices may push above the $50 mark in the next couple of weeks provided the dollar does not strengthen further," he told AFP.

"Traders think that the situation in Canada might persist longer than expected. If the wildfires damage infrastructure, this may delay production even longer," he added.

The blazes around the oil sands hub of Fort McMurray in Alberta, Canada have escalated, with about 8,000 workers
ordered evacuated overnight.

Some 100,000 residents and oil workers had already been evacuated from Fort McMurray and its surroundings two weeks ago. According to the Conference Board of Canada, oil production was reduced by 1.2 million barrels per day on average.

In Nigeria, a major trade union yesterday vowed to defy a court injunction and press ahead with a national strike to
protest government rises in petrol prices.

This follows several arrests by troops after armed attacks on an offshore oil facility.

Traders are also waiting for the release later today of a report on US commercial crude inventories, a closely-watched
gauge for demand in the world's top oil consumer.

Updated Date:

also read

Rupee declines 11 paise to close at 73.27 against US dollar amid steady capital outflows
Business

Rupee declines 11 paise to close at 73.27 against US dollar amid steady capital outflows

Dealers said a spurt in US dollar demand from importers and hardening yields in the US markets weighed on the rupee

Sensex extends losses, tumbles 341 points to 33,349 as new F&O series opens weak; Nifty down 95 points
Business

Sensex extends losses, tumbles 341 points to 33,349 as new F&O series opens weak; Nifty down 95 points

On a weekly basis, both key indices BSE Sensex and NSE Nifty recorded their second straight week of losses by falling 966.32 points, or about 3 percent, and 273.55 points, or 2.7 percent, respectively.

Sensex crashes 806 points to close below 35,200 as selling intensifies on weak rupee; Nifty down 259 points
Business

Sensex crashes 806 points to close below 35,200 as selling intensifies on weak rupee; Nifty down 259 points

Markets went into a free fall on Thursday with the benchmark Sensex crashing over 806 points to end below the 35,200-level after the rupee crashed to a new life-time low and global crude price breached the $86 a barrel.