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Brent creeps toward $50 as crude prices hit new 2016 highs

Tuesday, 17 May 2016 4:34 PM [ Last Update: Tuesday, 17 May 2016 4:35 PM ]

Brent crude pushed towards $50 a barrel in Asia Tuesday – the highest level since last November – as supplies from Canada are expected to be disrupted due to the ongoing forest fires.

Brent crude pushed towards $50 a barrel in Asia Tuesday, boosted by supply disruptions from the escalating Canadian wildfires and armed attacks against oil facilities in Nigeria, AFP reported.

The prices rallied for the eighth time in 10 sessions as uncontrolled forest fires are threatening to delay the return of at least one million barrels a day of Canadian oil-sands production to the market.

Wildfires burning around the oil sands hub of Fort McMurray in Alberta have been rapidly moving north, forcing firefighters to shift their efforts to protecting existing oil facilities.

In Nigeria, Africa's biggest crude producer, troops have made several arrests following the attacks on an offshore oil facility as the government on Monday moved to avert a labor strike over petrol prices.

"People are looking for any signs possible to confirm that supply is decreasing so any news of unplanned outages gets the market particularly excited," AFP has quoted BMI Research oil and gas analyst Peter Lee as saying.

"A break above $50 in the next few days is very possible. In the second half of the year, oil is likely to hold between $45 to $50 a barrel," he added.

A report by US banking giant Goldman Sachs has predicted a short-term supply deficit due to production outages, pointing to disruptions in Nigeria and Venezuela, which is deep in political crisis.

Prices have rebounded strongly since plunging to near 13-year lows below $30 in February but are still well below peaks of more than $100 a barrel reached in June 2014. The last time Brent touched $50 was in early November.

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