Crude oil prices were mixed to start the day Wednesday, with Nigerian oil offline at the same time as North American markets breathe a sigh of relief.
Shell Canada this week said it started to bring its oil sands facilities in Alberta back into operations, after closing for about six days because of the threat of wildfires. Provincial leaders meeting with Alberta oil operators said no "damage was sustained by any oil sands facility or other energy infrastructure" because of the fires, now moving east toward Saskatchewan.
Canada is the No. 1 oil supplier to the U.S. economy and deposits in Alberta are the largest outside of the Middle East. Tim McMillan, president and CEO of the Canadian Association of Petroleum Producers, said the sector will return to full production and retake its position as a key North American supplier now that the threat for wildfires is easing.
West Texas Intermediate, the U.S. benchmark price for crude oil, was down by about 0.65 percent to start the day at $44.37 per barrel. The price for Brent crude oil, the global benchmark, was up by just 0.1 percent to $45.57 per barrel.
Overseas markets are pressured by a spike in violence in Nigeria, Africa's top oil producer. A group calling itself the Niger Delta Avengers is waging a campaign against oil facilities in the region, forcing energy companies to evacuate their staff. A Shell subsidiary in Nigeria briefly halted exports amid growing threats from militants.
Oil prices have recovered from below $30 per barrel earlier this year. With markets moving toward a balance between supply and demand, the U.S. Energy Information Administration raised its forecast for the 2016 average for Brent crude oil by $6 per barrel to $41 per barrel.
The United States receives very little crude oil from Nigeria, though its own production is waning. EIA expects production to average 8.6 million in 2016 and fall to 8.2 million bpd next year. The 2017 forecast, however, is about 100,000 bpd higher than previous estimates as shale basins prove more resilient to the pressure from oil prices.
While cautioning its price forecasts are highly uncertain, EIA said WTI should be slightly less than Brent in 2016 and move closer to parity next year.
