Oil prices gain on supply concerns in Iran, Libya, Canada
Oil prices gained on Monday, with U.S. crude ending a choppy session higher on expectations for a Canadian production outage lasting until September, while global benchmark Brent gained on looming sanctions on Iran and falling output in Libya, APA reports quoting Reuters.
U.S. light crude futures gained 5 cents to settle at $73.85 a barrel. Brent jumped 96 cents at $78.07.
“We continue to see the oil market supported, with growing concern on sanctions on Iran now that the European and Korean refiners reduced their purchases to virtually zero,” said Andrew Lipow, president of Lipow Oil Associates.
The United States says it wants to reduce oil exports from Iran, the world’s fifth-biggest producer, to zero by November, which would oblige other big producers to pump more.
“There is concern that the Saudi and Russian increases in production might now be nearly enough to offset - not just Iranian production- but also supply disruptions that we’re seeing from Libya, Nigeria and Canada,” said Lipow.
In Canada, an outage at the 360,000-bpd Syncrude oil sands facility has reduced flows into Cushing, Oklahoma, the delivery point for U.S. futures.
Majority stakeholder Suncor Energy Inc (SU.TO) said on Monday that some Syncrude production would come back online in July, sooner than expected. It will not resume full operations until September, however, which is later than expected.
Monday’s updated timeline on the restart added a jolt of volatility into U.S. crude trading, said John Kilduff, partner at energy hedge fund Again Capital LLC in New York.
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