Investors will be looking out for a weekly report on the USA oil rig count at 1:00 p.m. EDT (1700 GMT) to gauge whether shale production is rising.
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“Brent crude, one of three key benchmarks for global oil trade, stood at just more than $50 early on Thursday, while WTI crude futures were just short of the important psychological level, up 0.5 percent at $49.85”. OPEC member Iran, which returned to world markets in January after the lifting of Western sanctions linked to its nuclear programme, has so far refused to curb production.
A meeting of the oil producer’s cartel, the Organization of the Petroleum Exporting Countries on June 2 may give further direction to oil markets, Nunan said. International Brent futures were at $49.36 a barrel, up 4 cents. US inventories shrank more than expected last week, government data showed, while supplies have also been curtailed in Nigeria, Venezuela and Canada.
WILDFIRES IN FORT MCMURRAY, ALTA.: The fires that struck the heart of Canada’s oilsands reduced the country’s crude output.
Suncor Energy Inc. restarted oil-sands operations in the Regional Municipality of Wood Buffalo, an area in Canada that includes wildfire-ravaged Fort McMurray.
A stronger dollar.DXY also weighed on demand for dollar-denominated oil from holders of currencies such as the euro EUR=.
“This move does appear to have been coming for the last couple of weeks, the question now is whether it can establish itself in a new range between $50 and $55”, said Craig Erlam, senior market analyst at OANDA.
“The yoy (year-on-year) declines in production would be 470,000 bpd in 2016 and 305,000 bpd in 2017 if we account for the impact of the estimated county-level well backlog being gradually brought back online between June 2016 and December 2016”, Goldman Sachs said. Analysts are cautious about a further rise, as United States producers could return, bringing the rally to an end.
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Talks in Doha involving OPEC members and other major producers such as Russian Federation last month failed to reach a deal to cap production. Earlier this month the attacks in Nigeria and political problems in Venezuela led to a reduction in supply, with the oil price hitting a six-month high on 17 May.
