TEMPO.CO, Jakarta - Global crude oil prices went slightly up on Friday morning, May 6, 2016, Jakarta time, as a result of massive fire across Canada's main shale and sand oil production area that has severely limited production output in the country.
An out-of-control blaze struck Fort McMurray, Canada's oil-producing town, forcing more than 80,000 people to evacuate their homes, with authorities stating that the actions taken in the next 24 hours will be crucial to the future survival of the town.
The blaze has yet to affect other rigs and refineries across Canada's oil-producing coastline, but several pipelines have been shut - and workers have been instructed to temporarily leave for their own safety. "This is a preventive measure - and production in the area is definitely facing a certain disruption due to the blaze," said Matt Smith of ClipperData. "The disruption is affection the distribution of some 800,000 barrels of oil per day to Canada's main trading hubs."
June contracts for the US benchmark, the West Texas Intermediate (WTI), closed higher by 54 cents to conclude trading at US$44,32 per barrel at the New York Mercantile Exchange on Thursday evening, New York time - after having reached a high of US$46,07 per barrel in November, before slowly retreating to its' current sale price.
Meanwhile in London, July contracts of the Brent North Sea oil also went up by 39 cents to conclude trading at US$45,01 per barrel.
Kyle Cooper from IAF Advisors said that investors were disappointed that global crude oil prices have began to slow down. "The rally, perhaps, is losing its' steam," said Cooper.
Analysts are also saying that prices are being propped by up by the political crisis in Libya, which may put a cap on its' overall production, the US decision to once again, lower its' production output in a bid to curb oil prices from descending further.
"US crude oil production output are at low point last seen in the past eight months - and the blazes in Canada certainly helped crude oil prices to rise, albeit slightly," said an analyst for CMC Markets, Jasper Lawler.
US overall output has been lowered to 46,000 barrel, which brings it down to 8,923 million barrels per day last week, according to the US Energy Information Agency last Wednesday, Xinhua reports.
ANTARA
