Last Update 19:18
Wednesday, 23 October 2019

Oil prices dip after latest surge

AFP , Wednesday 11 May 2016
Views: 1102
Views: 1102

Oil prices dipped in Asia Wednesday after the previous day's rally as Canadian oil companies prepare to restart production after being closed by huge wildfires.

The commodity has seen strong swings this week as traders weigh up the effects of the blazes that have torn across the vast oil sands region of Alberta as well as disruptions elsewhere.

Tuesday saw both main contracts rally as data showed output in oil major Nigeria had slumped to a 22-year low because of pipeline sabotage and increasing unrest that has seen major companies evacuate staff.

Rebels seeking a fairer share of revenue for locals in the oil-rich southern delta are increasingly targeting facilities, posing a fresh security challenge for President Muhammadu Buhari.

Also, Tuesday Canadian officials suggested output could take time to return to normal after the fires.

Alberta Premier Rachel Notley said facilities could come back online "in the coming days and short weeks ahead", after a meeting with oil company executives.

But analysts said they expected prices to flatline for the time being.

"The sentiment around traders in the market is that they do think the disruptions are a temporary obstacle. Longer-term, should oil companies resume production, they are expecting oil prices to hover around $40," CMC Markets senior trader Alex Wijaya told AFP.

At around 0715 GMT, US benchmark West Texas Intermediate for delivery in June was down 19 cents, or 0.43 percent, at $44.47, and Brent crude fell nine cents, or 0.20 percent, trading at $45.43 a barrel.

West Texas Intermediate soared 2.8 percent and Brent climbed 4.3 percent on Tuesday.

Investors are now waiting for the release of US Energy Information Administration's stockpiles report later in the day for an idea about demand in the world's biggest oil consumer.

A report Tuesday from the American Petroleum Institute (API) indicated inventories had risen last week.

Oil prices have been hammered over the past two years by weak demand, a huge supply glut, overproduction and a slowdown in the global economy, particularly China.

While the black gold is up from near 13-year lows in February, it is well down from the levels above $110 touched in mid-2014.

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