Oil dropped for a fourth day as producers in Canada started the process of resuming operations after wildfires crimped output and as Iran continued to boost exports amid a glut.
July futures slid as much as 0.7 percent in New York. Cooler weather is helping to control a blaze in the heart of the nation’s oil-sands region and allowing Suncor Energy Inc. and Syncrude Canada Ltd. to start getting back to work. Exports from Iran could surpass 2.2 million barrels a day by mid-summer, the head of National Iranian Oil Co. said, according to the Mehr news agency.
Oil has surged more than 80 percent from a 12-year low earlier this year on signs the global surplus will ease as U.S. output declines. The Organization of Petroleum Exporting Countries is unlikely to set a production target when the group meets June 2 as it sticks with Saudi Arabia’s strategy to squeeze out rivals, according to all but 1 of 27 analysts surveyed by Bloomberg.
“Outages from Canada to Nigeria have helped boost oil and the question is how long those disruptions will last,” Evan Lucas, a market strategist at IG Ltd. in Melbourne, said by phone. “Oil has moved up quickly and we’ll probably see a correction over the next couple of months.”
West Texas Intermediate for July delivery slid as much as 32 cents to $48.09 a barrel on the New York Mercantile Exchange and was at $48.13 at 12:36 p.m. Hong Kong time. The front-month June contract expired Friday after losing 41 cents to close at $47.75, capping a 1.2 percent decline over three sessions. Total volume traded was 41 percent below the 100-day average.
Canada Fire
Brent for July settlement was 20 cents lower at $48.52 a barrel on the London-based ICE Futures Europe exchange. The contract decreased 9 cents to close at $48.72 on Friday. The global benchmark was at a premium of 40 cents to WTI.
Municipal authorities, citing improved conditions late on Friday, lifted mandatory evacuation orders for seven oil-sands worker accommodation camps and production facilities in Alberta, including Suncor’s base plant mine and Syncrude’s Mildred Lake mine. More than 1 million barrels a day of output was taken off line by a wildfire that’s ravaged the region since the start of May.
Oil-market news:
Nigerian militants Movement for the Emancipation of the Niger Delta continued a cease-fire in hostilities and condemned activities by a group known as Niger Delta Avengers, which has led a campaign that has cut the nation’s output to the lowest since 1994. Speculators’ net-long position in WTI climbed by the most contracts since March through May 17, according to data from the Commodity Futures Trading Commission. Rigs targeting crude in the U.S. remained unchanged at 318 last week, according to Baker Hughes Inc.
