Worries over brimming inventories and a looming refined products glut were overweighed by some 2.5 million barrels of daily production that have been taken off the market due to the supply disruptions in Canada and elsewhere resulted in rise of global oil prices for again on Tuesday.
International Brent crude futures LCOc1 were up 47 cents, or 1 percent, from their last settlement as they traded around the $44 per barrel mark on Tuesday continuing their upward trend.
Held back more than Brent by record U.S. oil stocks, U.S. crude futures CLc1 were trading at $43.65 per barrel, up 21 cents.
Canadian officials said that almost 90 percent of buildings in the oil sands town of Fort McMurray were saved after the officials were able to got their first glimpse of Fort McMurray since a wildfire erupted and knocked out vast amounts of crude production there.
While evacuees need to leave production plants before staff can return, producers expect shutdowns of several weeks as facilities like pipelines that were close to the fires need to be inspected despite the improving conditions.
Global disruptions have been pushed to more than 2.5 million bpd since the beginning of the year due to the outages in Canada which consultancy Energy Aspects said now totaled 1.6 million barrels per day (bpd). A glut that emerged in mid-2014 and pulled down prices by around 70 percent before a recovery started early this year have at least been temporarily wiped out by this outage from Canada of oil supply.
While BMI Research said that production in Asia would fall by 4.9 percent in 2016, equivalent to 331,500 bpd, Goldman Sachs said it expected a decline in U.S. oil production by 650,000 bpd this year. Production in Latin America and Africa is also stalling.
Due to concerns about more than ample U.S. inventories, which are expected to hit records even with the disruptions in Canada, U.S. crude and Brent are down 2.3 percent and 2.8 percent respectively since last week's close despite the output reductions.
"Despite some significant supply disruptions, most notably in Canada, ongoing bearish fundamentals precipitated a modest retracement in prices," Societe Generale said in a weekly note to clients.
With crude inventories expected to have built by 500,000 barrels to a record above 543 million barrels, a Reuters poll showed that the U.S. commercial crude stockpiles have likely risen for a fifth straight week.
A balanced market with plentiful stocks might be reflected by a $40-$50 per barrel price range, said some traders.
Threatening to overwhelm demand despite the coming U.S. summer driving season, refiners have produced large volumes of gasoline and diesel with plenty of crude available.
"Crude cannot go up without support from products, and that support is not there at the moment, and more refineries are coming out of turnarounds so there will be more products and tanks are getting full," said Oystein Berentsen, managing director for crude at Strong Petroleum in Singapore.
(Source:www.reuters.com)
International Brent crude futures LCOc1 were up 47 cents, or 1 percent, from their last settlement as they traded around the $44 per barrel mark on Tuesday continuing their upward trend.
Held back more than Brent by record U.S. oil stocks, U.S. crude futures CLc1 were trading at $43.65 per barrel, up 21 cents.
Canadian officials said that almost 90 percent of buildings in the oil sands town of Fort McMurray were saved after the officials were able to got their first glimpse of Fort McMurray since a wildfire erupted and knocked out vast amounts of crude production there.
While evacuees need to leave production plants before staff can return, producers expect shutdowns of several weeks as facilities like pipelines that were close to the fires need to be inspected despite the improving conditions.
Global disruptions have been pushed to more than 2.5 million bpd since the beginning of the year due to the outages in Canada which consultancy Energy Aspects said now totaled 1.6 million barrels per day (bpd). A glut that emerged in mid-2014 and pulled down prices by around 70 percent before a recovery started early this year have at least been temporarily wiped out by this outage from Canada of oil supply.
While BMI Research said that production in Asia would fall by 4.9 percent in 2016, equivalent to 331,500 bpd, Goldman Sachs said it expected a decline in U.S. oil production by 650,000 bpd this year. Production in Latin America and Africa is also stalling.
Due to concerns about more than ample U.S. inventories, which are expected to hit records even with the disruptions in Canada, U.S. crude and Brent are down 2.3 percent and 2.8 percent respectively since last week's close despite the output reductions.
"Despite some significant supply disruptions, most notably in Canada, ongoing bearish fundamentals precipitated a modest retracement in prices," Societe Generale said in a weekly note to clients.
With crude inventories expected to have built by 500,000 barrels to a record above 543 million barrels, a Reuters poll showed that the U.S. commercial crude stockpiles have likely risen for a fifth straight week.
A balanced market with plentiful stocks might be reflected by a $40-$50 per barrel price range, said some traders.
Threatening to overwhelm demand despite the coming U.S. summer driving season, refiners have produced large volumes of gasoline and diesel with plenty of crude available.
"Crude cannot go up without support from products, and that support is not there at the moment, and more refineries are coming out of turnarounds so there will be more products and tanks are getting full," said Oystein Berentsen, managing director for crude at Strong Petroleum in Singapore.
(Source:www.reuters.com)
