Oil prices rise as wildfire curbs Canada output

May 06, 2016 | 11:31

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Petroleum prices finished modestly higher on Thursday as a huge wildfire in Canada's oil-sands region curbed production.

Petroleum prices finished modestly higher on Thursday as a huge wildfire in Canada's oil-sands region curbed production. (AFP/Philippe Huguen)

NEW YORK: Petroleum prices finished modestly higher on Thursday (May 5) as a huge wildfire in Canada's oil-sands region curbed production.

The uncontrolled blaze pressed in on the Canadian oil city of Fort McMurray after more than 80,000 people were forced to run for their lives. Authorities warned that the next 24 hours would be critical for the city's survival.

"Pipelines in the region are being shut as a precaution, while output at facilities in the area are being disrupted," said Matt Smith at ClipperData.

"Numbers are being bantered around, with estimates as high as 800,000 barrels per day for how much Canadian production could be offline," he said.

West Texas Intermediate (WTI) for delivery in June ended at US$44.32 a barrel, up 54 cents, on the New York Mercantile Exchange. The key US futures contract rose as high as US$46.07, a level last reached in November, before pulling back.

In London, European benchmark Brent crude for July delivery rose 39 cents to US$45.01 a barrel.

Kyle Cooper at IAF Advisors said that investors on Thursday had hit some resistance levels to further price gains. "This rally maybe was a little tired," he said.

On Thursday, prices also were supported by a political crisis in Libya that could limit its oil output and another fall in US oil production last week, analysts said.

"US oil production at its lowest in eight months, as well as a wildfire limiting Canadian output, have buoyed prices," said CMC Markets analyst Jasper Lawler.

AFP

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