Oil prices dip as Canadian oil evacuations lifted

The price of oil pushed toward US$50 a barrel on Tuesday as wildfires spread in Canada's oil sands region forcing thousands more to evacuate. (AFP/Haidar Mohammed Ali)

NEW YORK: Oil prices slipped on Monday (May 23) after Canadian officials lifted evacuation orders for several oil production sites in fire-ravaged Alberta province.

Officials on Sunday removed evacuation requirements at facilities belonging to Canadian firms Suncor and Syncrude as falling temperatures and light rain boosted efforts to control wildfires.

The fires, which forced the evacuation of 100,000 residents of Fort McMurray and the oil facilities to the north, interrupted the extraction and refining of an estimated 1.2 million barrels a day.

US benchmark West Texas Intermediate for July delivery shed 33 cents at US$48.08 a barrel on the New York Mercantile Exchange. Brent North Sea oil for July delivery, the European benchmark, lost 37 cents at US$48.35 a barrel in London.

"There was a little selling pressure because some of the fears about supply disruption around the world seemed to lessen a bit," said Gene McGillian of Tradition Energy.

Analysts also said prices were weakened by comments from Iranian officials vowing to keep pumping aggressively and not take steps to rein in production in the wake of the lifting of nuclear-related sanctions in January.

"The government has no plans for the time being to freeze or interrupt its increase in oil output and exports based on plans that are being carried out," National Iranian Oil Co. managing director Rokneddin Javadi told Iran's Mehr news agency, according to Bloomberg News.

Tehran's stance appeared to reinforce market doubts that the Organization of the Petroleum Exporting Countries (OPEC) - of which Iran is a member - will take any firm action to curb oversupply at its next meeting in Vienna on Jun 2.

Last month, talks in Doha involving OPEC members and other major producers such as Russia failed to reach a deal to cap production.