up on Canada wildfire, dollar; big weekly loss for Brent
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[May 07, 2016]
By Barani Krishnan
NEW YORK (Reuters) - Oil prices edged up
on Friday, supported by an early dip in the dollar and a wildfire that
has shrunk Canadian oil sands crude output by a third, but Brent still
ended with its sharpest weekly drop in four months as investors cashed
out of April's big rally.
Reports of a militant attack on a Chevron platform in Nigeria's
oil-rich Niger Delta region and a drop in the number of U.S. oil
drilling rigs also helped lift prices on the day.
The dollar, which has a huge impact on greenback-denominated
commodities such as oil, was down most of the day before recovering
in late trade. The dollar dipped after the U.S. government reported
that the economy added the fewest number of jobs in seven months in
April, raising doubts about whether the Federal Reserve will raise
interest rates before the end of the year.
Brent crude futures settled up 36 cents, or 0.8 percent, at $45.37 a
West Texas Intermediate (WTI) futures finished up 53 cents, or about
0.8 percent too, at $44.66.
For the week, Brent slid 6 percent for its biggest weekly decline
since January. WTI fell 3 percent. The drops came after
profit-taking by investors early in the week on April's gain of 20
percent or more in the two crude benchmarks.
"The global surplus still exists and there is still a possibility
that oil prices could retrace further," said Dominick Chirichella,
senior partner at the Energy Management Institute.
"However, the market is trading more and more in sync with the
forward-looking or perception view, with the current bearish
fundamentals mostly priced into the market."
At least 720,000 barrels per day (bpd) of Canada's crude production
capacity remained offline as the wildfires ravaged the oil town of
Fort McMurray in Alberta and forced evacuation of workers and
precautionary production cuts or shutdowns at about a dozen major
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While most of the oil sands are to the north of the city, CNOOC
Nexen's Long Lake facility and Athabasca Oil's Hangingstone project
are south of Fort McMurray and were in danger, according to
emergency officials. Both facilities have been evacuated.
The U.S. oil rig count, compiled by oilfield services provider Baker
Hughes fell by four this week, extending a decline to a seventh week
and the lowest level since October 2009.
Some analysts said oil output in the Americas is declining so fast
that it looks like the region alone could resolve the global
"Unplanned oil supply disruptions have been a key element so far
this year that have contributed to a tighter oil market than was
otherwise expected," said analyst Guy Baber of Simmons & Co.
(Additional reporting by Karolin Schaps in London; Editing by
Marguerita Choy and Steve Orlofsky)
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