Pray for the Canadian

[dan_s]

This week’s massive forest fire in Alberta, Canada, could be the most costly natural disaster in the province’s history. The fire, which now covers more than 328.2 square miles, continues to burn as high temperatures and dry conditions in the boreal forest make the area highly flammable.

http://www.oilandgas360.com/wildfires-c ... dium=email

[Fosterplc]

Terrible stuff and amazing there are so few injuries, thank God. Its impacting nearly half of the oil sands production, but unclear how much production will be shut in while workers attend to their emergency needs. Plenty of oil in storage and producers have declared force majeure. I can only imagine some market upswing in crude monday morning.

[dan_s]

Reuters estimates 640,000 barrels per day shut in due to the fires.

[dan_s]

Sunday from Investing.com: "Nearly one million barrels per day of Canada's crude production capacity had been taken offline as of Friday as the wildfires ravaged the oil town of Fort McMurray in Alberta and forced evacuation of workers and precautionary production cuts or shutdowns at about a dozen major facilities. Fort McMurray is the center of Canada's oil sands region."

[dan_s]

May 8 at 8.30 ET: "NYMEX crude jumps in Asia as Canada fire, Saudi oil chief switch eyed"

[Fosterplc]

It went the other way! Oil down as storage trumps wildfire. Who woulda thought?

[dan_s]

Speculators control NYMEX oil prices and from day-to-day it is impossible to know which way they will push and pull oil prices. Sometimes it is exactly the opposite of what you'd expect to happen. Longer term (beyond the 24-hour news cycle), Non-OPEC supply is falling, the rate of decline will accelerate and OPEC cannot meet global oil demand on their own. This is a recipe for higher oil prices.