Oil prices jumped on Wednesday, with Brent surging about 4 per cent for a second day in a row, after the US government unexpectedly reported crude inventories fell for the first time since March.
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Crude futures had meanwhile already surged on Wednesday after the U.S. government’s Department of Energy said inventories slid 3.4 million barrels last week.
Oil prices fell early on Tuesday as Canadian wildfires that have knocked out over 1 million barrels worth of daily crude capacity moved away from production facilities, while brimming inventories and a strong U.S. dollar weighed on markets.
Wildfire in Canada’s oil-rich Alberta province has knocked off some 1.6 million bpd, according to consultancy Energy Aspects.
International Brent crude futures were trading at $44.10 per barrel at 0702 GMT, up 47 cents, or 1 percent, from their last settlement.
New York’s West Texas Intermediate for delivery in June won 42 cents to stand at $46.65 a barrel, after soaring the previous day to its highest closing level since November 2015.
Canadian authorities were focusing on restoring output after the fires that have raged for a week forced oil companies in the area to shut down operations, slashing production by one million barrels a day.
SINGAPORE – Oil prices dipped in early trading on Friday as a stronger dollar weighed and Russian Federation warned that a global crude supply overhang could last into next year.
Oil prices held near six-month peaks on Thursday as the IEA forecast a sharp drop in the supply glut, and following a surprise fall in United States crude reserves.
Until last month, oil had seen one of the strongest rebounds since the financial crisis, with prices rallying almost 80 percent from multiyear lows under $30 a barrel in the first quarter, supported by falling USA production, supply constraints in Libya and the Americas and a weak dollar.
“The narrative has shifted back to the supply build after the pinch in supply due to disruption in the oil sands and in Libya and Nigeria”, Michael Hewson, chief market analyst at CMC Markets, said.
“The market is close to balanced. when we consider the large amount of supply offline in Canada and elsewhere”, investment banker Morgan Stanley said.
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Monthly trading ranges, or the difference between the high and low closing oil prices in a given month, are another way of measuring volatility.
