Oil prices traded roughly flat Friday in response to multiple supply disruptions that helped pare down some of the global crude glut that has battered the oil market for nearly two years.
Prices were trading near 2016 highs as outages in Nigeria, Canada and Libya further tightened global supplies. But crude storage sites are still brimming full across the world, serving to stave off actual supply shortfalls and limiting sharper price gains, traders told Reuters.
Brent crude, the global benchmark, was trading down 0.31 percent to $48.66 at 8:15 a.m. EDT, close to a six-month high of $49.85 reached Wednesday. West Texas Intermediate, the U.S. oil-price gauge, was down 0.15 percent to $48.09 a barrel, not far from a seven-month high of $48.95 achieved this week.
The Australian bank ANZ estimated unexpected supply disruptions amount to around 2.5 million barrels of daily production, Reuters reported. The estimate doesn’t include falling output in the United States, which was largely foreseen as producers curtailed investments and abandoned plans to drill new wells.
In Nigeria, militant activity in the oil-rich Niger Delta has driven the country’s crude oil output to more than 22-year lows of less than 1.4 million barrels per day. Intruders Thursday blocked access to Exxon Mobil’s Qua Iboe export terminal, Nigeria’s largest crude oil stream, although Exxon reportedly said the terminal continued operating.
Canadian oil production has also faltered in recent weeks as massive wildfires forced closures of key oil-sands mining sites and the evacuation of thousands of residents and workers. Output disruptions in the western Alberta province have reduced daily production by around 1 million barrels, energy officials estimated.
Internal conflicts in Libya are also stalling oil exports from one of Africa’s largest oil producing nations.
Despite the outages, some analysts said recent oil price gains were unsustainable. Harry Tchilinguirian, lead oil and commodities strategist at French bank BNP Paribas in London, said oil prices would likely fall back down to the mid to high $30-a-barrel range. “We feel that markets have moved too high, too far, too soon,” he told Reuters’ Global Oil Forum.