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Canadian Crude Rises 70% On Unprecedented Output Cuts

Canadian Crude Rises 70% On Unprecedented Output Cuts

Canadian crude prices recovered in…

One-Quarter of Canadian Oil Sands Offline as Second Wildfire Reaches Alberta

Oil Sands Canada

As the first wildfire that started in Fort McMurray continues to rage and thousands are evacuated from a nearby oil work camp where they had sought refuge, a second wildfire has crossed over into Alberta adding to the human and material woes.

The second wildfire started further away in northeast British Columbia, but has now crossed over into Alberta, as firefighters continue to fight the more catastrophic fire that started in Fort McMurray and then spread south quickly.

Reports are describing the fire in geographical terms as larger than New York City.

So far, the fire has led to the evacuation of the some-90,000 residents of Fort McMurray, many of whom were airlifted to safety, while some 1 million barrels per day of Canadian oil has been taken offline.

Related: Is This The Biggest Red Herring In Oil Markets?

Suncor Energy, whose oil sands operations are closest to Fort McMurray, said its plant was safe, but it was reducing crude production in the region to allow employees and families to reach safety.

CNOOC’s subsidiary, Nexen Energy, also has the Long Lake oil-sands project, close to Fort McMurray. The company has said it was likewise slowing operations in light of the wildfire and the evacuation mandate.

On Thursday, oil rose above $45 due the reduced output. However, on Friday morning, crude oil futures dipped lower despite the offline production in Canada as traders once again refocus on the overriding oil glut.

Related: 500,000 Barrels And $1 Billion In Losses: The True Cost Of Canada’s Wildfire

WTI was down 0.6 percent at $44.06 per barrel on the NYSE, while Brent was down 0.7 percent at $44.71 per barrel on Europe’s ICE Futures exchange.

In the meantime, there are concerns about the fate also of Canada’s temporary foreign oil workers, whose status is now in question and who may have to return home if the wildfire means they no longer have jobs, as work permits are attached to a single, non-transferrable employer.

By Charles Kennedy of Oilprice.com

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