MARKET WATCH: Oil prices fall on reports of slowing in spread of Canadian wildfires

Light, sweet crude prices settled below $44/bbl on the New York market on May 9, down more than $1/bbl on reports that the spread of Canada’s wildfires has slowed and the blaze has moved away from key oil sand production areas, at least for now.

Reports of limited damages to production equipment “could allow for a fast ramp-up in production, once the fire is under control,” Goldman Sachs Group Inc. said in a research note.

Damage to oil sands areas appears to have been limited with many production shutdowns done preliminary as a precaution to evacuate workers, analysts said. Meanwhile rain and cooler temperatures in Alberta helped slow the spreading flames.

Alberta Premier Rachel Notley declared Fort McMurray was largely spared, adding that a plan will be implemented so most of the 88,000 evacuees can return to their homes. Fires incinerated homes in at least two Fort McMurray neighborhoods, but firefighters estimated that 90% of the city was intact.

Energy prices

The June crude oil contract on the New York Mercantile Exchange fell $1.22 to settle at $43.44/bbl, and the July contract was down $1.29 to $44.03/bbl.

The NYMEX natural gas contract for June declined a fraction of a cent to remain at $2.10/MMbtu. The Henry Hub price was $1.97/MMbtu, up 13¢.

Heating oil for June delivery fell 5¢ to a rounded $1.29/gal. The price for reformulated gasoline stock for oxygenates blending for June dropped 5¢ to remain at a rounded $1.44/gal.

The Brent crude contract for July on London’s ICE was down $1.74 to $43.63/bbl. The August contract fell $1.67 to $44.19/bbl. The May gas oil contract was $380.75/tonne, down $19.25.

The Organization of Petroleum Exporting Countries basket of crudes was $40.76/bbl, up 21¢.

Contact Paula Dittrick at paulad@ogjonline.com.

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