Oil prices erase early fall to end little-changed

Oil prices pulled back from early losses on Thursday (May 19) to end barely changed, as the market focuses on continued supply disruptions in Nigeria and Canada and potential outages in turbulent Venezuela.

Prices closed below Wednesday’s 2016 highs, with US benchmark WTI crude for June delivery off 11 cents at US$48.67 a barrel, and London contract Brent North Sea for June off 12 cents to US$48.81.

The stronger dollar, boosted by rising expectations that the Federal Reserve will raise interest rates in June or July, still had downward pressure on crude, which is priced in dollars, Channel News Asia reports.

In Canada, oil worker camps in the Fort McMurray oil sands region remained closed down and some one million barrels a day of production shuttered as forest fires expanded away from the area.

‘The fire continues to spread to the northeast, out and away from communities and oil sands facilities and into forested areas,’ Alberta wildfire manager Chad Morisson said.

‘We held the fire yesterday in all critical areas and with the lower temperatures and higher humidity we continue to see more success today.’ There was no immediate threat to oil sands facilities, he added.

EY oil and gas analyst Sanjeev Gupta said the market is also watching indicators of the pace of growth in major consumers around the world, after Japan turned in better-than-expected 0.4 per cent growth in the first quarter of the year.

‘In the near term, the oil market will watch closely economy data from Japan and the US due to be released next week,’ Gupta said.

‘Outages and supply disruptions in Canada, Nigeria and Venezuela will also impact the balancing of the oil market,’ he said in a note.