The raging huge wildfire in Cana has contributed to a significant tightening of markets over the past weeks as Canada's oil sand region knocked out over a million barrels in daily production capacity resulting in a jump of the oil prices on Monday.
With almost all of Canada's crude from oil sands exported to the United States, The amount of oil that has been lost is roughly equivalent to well over a third of the country's typical daily production.
Rising for a fourth session in a row the U.S. crude futures CLc1 jumped 84 cents or 1.9 percent to $45.50 per barrel by Monday morning.
International Brent crude LCOc1 rose 62 cents, or 1.4 percent, to $45.99 a barrel.
"The fires have caused pipeline shutdowns ... several producers in the area have evacuated all but the most essential employees," energy brokerage Poten and Partners said in a letter to clients.
However the energy brokerage firm also added that the inventory levels in both the countries of Canada and the U.S. will provide a cushion for some time.
While there was no timeline for a restart of the oil industry operations at evacuated sites, the Canadian officials on Sunday showed some optimism about the fire as favorable weather helped fire fighters and drive the flames away from the oil sands town Fort McMurray.
"The market is close to balanced... when we consider the large amount of supply offline in Canada and elsewhere, which could last for months," Morgan Stanley said.
Eroding a 1-2 million barrels per day supply overhang that pulled down oil prices by 70 percent between 2014 and early 2016, the U.S. shale oil output is in decline and production is also falling in Latin America, Asia, and Nigeria.
Barclays said that globally some 2.2 million barrels of daily output were currently offline and that 1.25 million barrels of daily production were currently affected in Canada.
The appointment of Khalid al-Falih as head of the new Ministry of Energy, Industry and Mineral Resources in Saudi Arabia, the world's biggest oil exporter is being watched eagerly by the market as a government shake-up happened in the country over the weekend.
Petroleum Ministry led by veteran minister Ali al-Naimi has previously controlled he oil policy of the country.
"We are committed to meeting ... hydrocarbons demand from our expanding global customer base, backed by our current maximum sustainable capacity," Khalid al-Falih said on Sunday.
A strategy of defending market share rather than reducing production to support prices has been the stated line for the Organization of the Petroleum Exporting Countries (OPEC) since 2014 which has been led by Saudi Arabia.
"Changes in Saudi Arabia oil leadership only underscore the shift in strategy to one focused on market share over price," Morgan Stanley said.
The move "does not represent a shift in the Kingdom's current oil policy," RBC Capital Markets said.
(Source:www.reuters.com)
With almost all of Canada's crude from oil sands exported to the United States, The amount of oil that has been lost is roughly equivalent to well over a third of the country's typical daily production.
Rising for a fourth session in a row the U.S. crude futures CLc1 jumped 84 cents or 1.9 percent to $45.50 per barrel by Monday morning.
International Brent crude LCOc1 rose 62 cents, or 1.4 percent, to $45.99 a barrel.
"The fires have caused pipeline shutdowns ... several producers in the area have evacuated all but the most essential employees," energy brokerage Poten and Partners said in a letter to clients.
However the energy brokerage firm also added that the inventory levels in both the countries of Canada and the U.S. will provide a cushion for some time.
While there was no timeline for a restart of the oil industry operations at evacuated sites, the Canadian officials on Sunday showed some optimism about the fire as favorable weather helped fire fighters and drive the flames away from the oil sands town Fort McMurray.
"The market is close to balanced... when we consider the large amount of supply offline in Canada and elsewhere, which could last for months," Morgan Stanley said.
Eroding a 1-2 million barrels per day supply overhang that pulled down oil prices by 70 percent between 2014 and early 2016, the U.S. shale oil output is in decline and production is also falling in Latin America, Asia, and Nigeria.
Barclays said that globally some 2.2 million barrels of daily output were currently offline and that 1.25 million barrels of daily production were currently affected in Canada.
The appointment of Khalid al-Falih as head of the new Ministry of Energy, Industry and Mineral Resources in Saudi Arabia, the world's biggest oil exporter is being watched eagerly by the market as a government shake-up happened in the country over the weekend.
Petroleum Ministry led by veteran minister Ali al-Naimi has previously controlled he oil policy of the country.
"We are committed to meeting ... hydrocarbons demand from our expanding global customer base, backed by our current maximum sustainable capacity," Khalid al-Falih said on Sunday.
A strategy of defending market share rather than reducing production to support prices has been the stated line for the Organization of the Petroleum Exporting Countries (OPEC) since 2014 which has been led by Saudi Arabia.
"Changes in Saudi Arabia oil leadership only underscore the shift in strategy to one focused on market share over price," Morgan Stanley said.
The move "does not represent a shift in the Kingdom's current oil policy," RBC Capital Markets said.
(Source:www.reuters.com)