“As oil sand production restarted on Tuesday after the wildfire’s that ran havoc through Fort McMurray over the last week, traders were looking towards this afternoons oil inventories. Oil prices initially dropped this morning but soon started to rise reaching a high of $44.97 per barrel later in the afternoon.
The news that Fort McMurray has started production on some of the lines will have played a large part in the drop we saw this morning in oil prices with it being estimated that while production was halted it was losing around 1 million barrels per day in production. The pullback we saw later in the day will have been as a direct result of news coming from Nigeria that Shell have announced that they are closing the Nembe creek Trunk line after a leak. Traders are now looking at the possibility that this will cause disruption to oil output from Nigeria which may push it to the lowest it has been for over twenty years.
Even with these two fundamentals coming into play today, traders will be focused on the crude oil inventories that are forecasted at 0.714m with a previous of 2.784m.