Crude falls as Canada to resume oil-sands output after wildfires
NEW YORK (Bloomberg) -- Oil dropped for a fourth day as producers in Canada worked to resume operations after wildfires and Iran continued to increase exports.
July crude fell as much as 2.1% in New York. Cooler weather is helping to control a blaze in Canada’s oil-sands region and allowing Suncor Energy Inc. and Syncrude Canada Ltd. to start getting back to work. Iranian exports could surpass 2.2 MMbpd by midsummer, the state oil company told the Mehr news agency. Declines eased after Genscape Inc. was said to report that supplies slipped at Cushing, Okla., the delivery point for New York futures.
"The news that the Canadians are trying to resume production in Alberta and that Iran is planning to export 2.2 MMbopd this summer is putting a damper on the market," said Gene McGillian, a senior analyst and broker at Tradition Energy in Stamford, Conn. "We’ve been seesawing after rising to a seven-month high last week."
Oil has surged more than 80% from a 12-year low in February on signs the global surplus will ease as non-OPEC output declines. The Organization of Petroleum Exporting Countries is unlikely to set a production target when it meets June 2 as it sticks with Saudi Arabia’s strategy to squeeze out rivals, according to all but one of 27 analysts surveyed by Bloomberg.
West Texas Intermediate oil for July delivery fell 39 cents, or 0.8%, to $48.02/bbl at 11:31 a.m. on the New York Mercantile Exchange. Futures slipped as much as $1.01 to $47.40 earlier. Total volume traded was 30% below the 100-day average.
Improving conditions
Brent for July settlement slipped 58 cents, or 1.2%, to $48.14/bbl on the London-based ICE Futures Europe exchange. The global benchmark traded at a 12-cent premium to WTI.
Municipal authorities in Alberta, citing improved conditions late on Friday, lifted mandatory evacuation orders for seven oil-sands worker camps and production facilities, including Suncor’s base plant mine and Syncrude’s Mildred Lake operation. More than 1 MMbpd were halted by wildfires that ravaged the region since the start of May.
In Iran, National Iranian Oil Co. Managing Director Rokneddin Javadi told Mehr that the country has no plans to join any attempt by global oil producers to freeze output because it’s still ramping up exports to pre-sanctions levels. Iran is due to meet with other OPEC members at the June 2 summit.
Libyan shipment
Crude exports resumed from the Libyan port of Hariga after the National Oil Corp. and officials based in the east reached an agreement last week. Since the deal was announced, the tanker Seachance loaded 660,000 bbl of crude and sailed from Hariga on Friday, Tripoli-based National Oil Corp. said in a statement. The cargo was the first international shipment from the port since the regime in the east refused to let the tanker leave port in early May.
"Iranian comments about their plans to increase exports, the resumption of Libyan exports and the fact that Canadians are getting back out to oil facilities give us three big reasons to be lower," said Phil Flynn, senior market analyst at Price Futures Group in Chicago.
Gasoline futures increased as Total SA said fuel shortages spread to more than a quarter of its French gas stations after motorists rushed to fill their tanks over the weekend amid strikes and blockades over labor-law changes. Some 612 gas stations faced shortages or lacked any fuel Monday morning, up from 336 a day earlier, Total said in a statement.
June gasoline futures rose 0.6% to $1.6447/gal. Diesel for June delivery slipped 0.6% to $1.4816.
