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May 5, 2016

Iran reaches pre-sanctions level of production, Canada outage in supply boost oil prices

Iran reaches pre-sanctions level of production, Canada outage in supply boost oil prices

Oil production in Iran will reach 3.8 million barrels per day over the next few days said to Bloomberg Roknoddin Javadi, deputy oil minister and managing director of state-owned National Iranian Oil Company. It is obvious that Iran’s intention to return to pre-sanctions levels of oil production at a rate of about 4 million barrels per day remain quite serious.

After regaining market share, which the country controlled before the introduction of international sanctions, Iran is ready to discuss joint actions in the oil market with other OPEC members added Rokneddin Javadi. As reported by Bloomberg, Iran may join OPEC quota in one or two months after increasing output to pre-sanctions level of oil production and exports.

In April Iran exported an average of 2.1 million barrels of oil per day the deputy minister noted.
Crude futures of Brent and WTI sorts are trading in positive territory on the background of disruption in oil supplies due to forest fires in Canada and the escalation of military clashes in Libya but is moved away from session highs.
The boost of production in Iran is a matter for worries for one of its major export competitors in the Middle East –  Saudi Arabia. As it became known yesterday crude output in Saudi Arabia has already reached 10.15 million barrels per day.

The fire which led to the evacuation of all 88,000 dwellers of the oil center – Fort McMurray in Canada and destroyed 1,600 buildings, now threatens local airport and southern part of the city, officials said on Wednesday.
Some areas of the city in the southeast of Alberta, in the heart of Canada’s oil sands region, already lay in ruins.
As we move to the south of the fire, authorities announced a mandatory evacuation of the settlements, located 50 kilometers south of Fort McMurray.

According to officials, there is no victims of the calamity, but it is known of at least one car accident in the course of the evacuation.
A huge cloud of black smoke can be seen at a distance of more than 60 kilometers from the city, the fire can not stop the fire.
“We may lose a significant part of the city”, – said Scott Long, a spokesman for Emergency Management Agency Alberta.
The main oil facilities are located outside the fire spread, however, companies are trying to help and evacuate employees and protect conduits, which led to a cut in production.

Premier of Alberta Rachel Notley said that the Fort McMurray destroyed about 1,600 buildings. The province declared a state of emergency. Canadian Prime Minister Justin Trudeau said that the military could send planes into the city, if necessary. International Airport Fort McMurray suspended all commercial flights.
The consequences for oil production are still unclear, but the Canadian company Suncor Energy said on Wednesday the suspension of work on its core deposit on oil sands may result in a cut of 350,000 barrels/day  in output. Production on the rest of oil fields was decreased as well.Oil futures gained about three percents on supply outages from Canada, WTI rose to $45/barrel, while Brent floats near $45.50/barrel.

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