Supply Cuts Push Up Oil Prices

Supply Cuts Push Up Oil PricesSupply Cuts Push Up Oil Prices

Oil rose on Tuesday, driven by supply disruptions in Canada and elsewhere, which have knocked out 2.5 million barrels of daily production and temporarily eclipsed concern over high global inventories and a looming surplus of refined products.

In spite of outages from Canada to Nigeria, oil prices are down by more than 2% so far this week, hampered by worries that even hefty dents to production will have little effect on the growth of stocks of unwanted crude, CNBC reported.

Brent crude futures were up 93 cents on the day at $44.56 per barrel, while US crude futures were up 47 cents at $43.91 per barrel, having recovered from a brief dip.

Canadian officials got their first glimpse of the oil sands town of Fort McMurray since a wildfire erupted and knocked out vast amounts of crude production there and they said almost 90% of its buildings were saved.

Outages in Canada, which consultancy Energy Aspects said now totaled 1.6 million barrels per day, have brought global disruptions to more than 2.5 million bpd since the beginning of the year.

This has at least temporarily wiped out a surplus that emerged in mid-2014 and slashed 70% off prices before a recovery started early this year.

On Tuesday, the chief executive of Saudi Arabia's state-owned oil giant Saudi Aramco also said the company would likely increase its output to meet demand.