Oil Falls on Higher Nigerian Output and Global Growth Fears

Oil fell towards $50 a barrel on Thursday, pressured by higher Nigerian output and concern about the economic outlook following Britain’s vote to leave the European Union last week.

Returning Nigerian supply will put pressure on prices, Goldman Sachs said, adding that outages caused by Canadian wildfires would virtually end by September.

Norwegian supply could be hit by a threatened workers’ strike, however.

Brent crude LCOc1 was down 48 cents a barrel at $50.13 as of 0856 GMT, having risen in the two previous sessions. U.S. crude CLc1 was down 48 cents to $49.40.

“Supply is gradually improving in Canada, although in Norway we still have some risk,” said Olivier Jakob of Petromatrix, who added a weak gasoline crack was weighing on crude.

“I don’t think the case is there for $30 oil, but to go to $60 you need to see stronger support from the products.”

Brent has risen by 85 percent since reaching a 12-year low in January, supported by expectations that a glut that has been weighing on prices since 2014 would start to ease and by unplanned losses from Canada to Nigeria.

Nonetheless, the return of some of that oil and concern over a slowing economy, compounded by Britain’s vote to leave the European Union, are weighing near-term, analysts said.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza