Crude Oil traders have largely dismissed the massive forest fires in Fort McMurray, which caused the outage of more than 1 million barrels of oil production per day. Instead, the markets saw that the forest fires might not spread as much as was previously thought over the weekend, and the forest fires remained at a distance from some major sources of production. Again, as we said last week, the supply disruptions, for now, have more to do with the evacuation of personnel, and not lasting damage to facilities. The outage is very substantial, but unless it lasts much longer than expected, the oil markets should not be affected by the events too much.
Meanwhile, reports from Genscape suggest that oil storage levels continue to climb, a bearish signal for oil. Crude prices shot up in early trading on May 9 but WTI lost more than 2 percent by Monday’s close and Brent dropped by nearly 4 percent. |
