Oil trimmed its third weekly advance as Canadian energy producers moved to resume operations after wildfires eased.
Futures fell 0.9 percent in New York, paring the weekly advance to 2.7 percent. Suncor Energy Inc. is seeking to return most of its workers by next week and begin startup of oil-sands facilities that were shut down by forest fires, according to people with knowledge of the matter. Crude climbed above $50 a barrel on Thursday as a decline in U.S. crude stockpiles and production eroded a global supply glut.
Oil has surged more than 85 percent since February on signs the worldwide surplus will ease amid declining production in Nigeria and non-OPEC countries including the U.S. The Organization of Petroleum Exporting Countries is unlikely to set an output target when it meets June 2 as it sticks with Saudi Arabia’s strategy of squeezing out rivals, according to analysts surveyed by Bloomberg.
“After breaking this much-watched level for the first time in 2016,” oil prices were unable to hold above $50, Norbert Ruecker, Head of Commodities Research at Julius Baer Group Ltd., said in a note.Â “We see more downside than upside” because of a persistent supply glut and the current excessively bullish sentiment, he said.
West Texas Intermediate for July delivery was down 66 cents to $48.82 at about 8:30 a.m. Central time on the New York Mercantile Exchang. The contract fell 8 cents to close at $49.48 on Thursday after advancing 3.8 percent the previous three sessions. Total volume traded was about 43 percent below the 100-day average.
Brent for July settlement slid as much as 79 cents, or 1.6 percent, to $48.80 a barrel on the London-based ICE Futures Europe exchange. The contract on Thursday fell 15 cents to $49.59 after climbing as high as $50.51 during intraday trade. Prices are up 0.4 percent this week. The global benchmark traded at a premium of 5 cents to WTI.
Midwest and Rocky Mountain pipeline operators have cut the cost of transporting oil, as they vie for a shrunken supply of crude in the aftermath of Canada’s wildfires. The blaze that began in early May shut about 1.2 million barrels a day of production, according to company statements and data published in Alberta’s Spring Oil Sands Quarterly.