Production Outages Push Oil Prices Higher

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Oil price graph illustration

Oil prices went up on Tuesday, fueled by production outages in Canada and Nigeria that removed about 2.5 million barrels of daily production from the global market and temporarily overshadowed worries over the months-long supply glut.

In spite of output disruptions in Canada and Nigeria, prices have fallen by more than 2 percent so far this week, as market players believe that these outages will have little or no effect on the on the worldwide oversupply of oil.

Brent crude futures (LCOc1) tacked on 75 cents, trading at $44.38 per barrel by 0945 GMT, while U.S. crude futures (CLc1) gained 45 cents at $43.89 per barrel.

Canadian production was disrupted after a wildfire erupted in the country’s oil-rich Alberta province.

Fire officials reported that cooler temperatures helped in slowing the spread of the wildfires but noted that firefighting efforts could last for a few more weeks given the scale of the fire.

In Nigeria, a series of attacks on its oil infrastructure has severely limited its production to near 22-year lows, Reuters data shows, adversely impacting the country’s finances.

Meanwhile, the chief executive of Saudi Arabia’s state-owned oil company, Saudi Aramco, said that he expects oil demand to rise globally by about 1.2 million barrels per day this year.

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