During Wednesday’s Asia trade, crude prices went down because market participants reacted to surging surplus from Saudi Arabia as well as supply disruptions in African and Canada.
In New York, sweet light June delivery oil futures were worth $44.45, just 0.5% down. As for Brent crude futures, they dipped 0.4%, trading at $45.33 per barrel.
Overnight, crude prices leapt following supply outage in Canada. That gave a hope that the global oversupply is gradually going down. Wildfires in the oil-rich province of Alberta resulted in a loss of approximately 1.6 million barrels a day.
In addition to that, political strife in Libya as well as a series of attacks on Nigerian oil facilities have also hurt the courtiers’ oil exports.
However, financial analysts point out that all these recent disruptions are going to be short lived and in general the market will remain oversupplied in the nearer future, being underpinned by ballooning production by key producers such as Iran or Saudi Arabia, who keep fighting for a market share.