A bigger-than-expected build in U.S. crude inventories to fresh record highs pushed oil markets down after an early rally on Wednesday over concerns about production cuts in Canada's oil sands region.
Brent was down 25 cents at $44.72 per barre, after trading as high as $46.01. U.S. Crude settled 13 cents higher, or 0.3 percent, at $43.78, after hitting a session high at $44.88. WTI also snapped a three-day losing streak.
U.S. crude stocks, which have been setting record highs since January, grew 2.8 million barrels last week, government data showed, about a million barrels more than analysts' expectations. Gasoline stocks also posted a surprise increase.
The data overshadowed concerns over evacuations in the Canadian province of Alberta, where a wildfire raged unchecked through the Canadian city of Fort McMurray in the heart of the country's oil sands region, prompting some companies, including Suncor Energy and Royal Dutch Shell, to cut back production.
Brent crude has fallen more than 5 percent from Friday's high in response to rising output from the OPEC, signs of economic slowdown in the United States and Asia, and a stronger dollar.
While total OPEC output rose in April, outages around the world have been supporting prices. The Canada disruption adds to supply losses in Nigeria and Iraq, concern about renewed losses in Libya and fears that Venezuela's cash crunch could hit the OPEC member's output. Some believe the rally has further to go in 2016 as the supply glut eases.
Barclays believe that unplanned outages look unlikely to abate in the next couple of months, which have contributed to a tighter 1H16 oil market and that lower spare capacity, heightened disruption risk in Iraq and Venezuela, and lower supply ex-U.S. mean prices will likely average higher in Q4 than previously forecast.
The bank said that it expected Brent to average $44 per barrel this year, an upward revision of $5 from its previous outlook, and U.S. crude to average $42 a barrel this year.
In oil production, U.S. output has fallen from a peak of over 9.6 million barrels per day (bpd) in summer last year to just over 8.8 million bpd currently, triggering one of the biggest wave of bankruptcies in American corporate history. But inventories, particularly the latest from the EIA, suggest supply is more than ample for now. (CNBC)
Skangas duel fuel LNG carrier Coral Energy (image credit/Skangas)
Liquified natural gas (LNG) bunker tanker Coralius has made its first trip loading and delivering LNG to and from Norwegian ports, according to trade press reports.
The 5,800 cubic meter capacity tanker, which is owned by Norwegian gas company Skangas, was delivered to the company in June. Skangas also operates LNG carrier Coral Energy.
OPEC Cutback Extension to be Discussed in November, But Developments Could Render Any Deal Meaningless
Analysts say everything from Saudi exploration to rising tensions with North Korea could radically alter the dynamics of the international market. File Image / Pixabay
Ever since the Organization of the Petroleum Exporting Countries (OPEC) extended the duration of its production cuts earlier this year to March of 2018, speculation has been rampant that the meager cutback volume coupled with the large number of members