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    Supply Disruptions from Nigeria to Canada Worsens as Saudi Lower Oil Price in Sign of Glut

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    Babatunde Akinsolahttps://naija247news.com
    Babatunde Akinsola is aNaija247news' Southwest editor. He's based in Lagos and writes on the Yoruba Nation political issues, news and investigative reports

    Brent crude has climbed 14 percent since the start of the year on supply disruptions from Nigeria to Canada. Prices are still 20 percent lower in the past year. Saudi Arabia led the November 2014 decision by the Organization of Petroleum Exporting Countries to maintain production levels to drive out higher-cost producers.

    “The main bullish factor has been the outages,” said Michael Wittner, the New York-based head of oil-market research at Societe Generale SA. “There are many outages, led by Nigeria and Canada. We’re missing a lot of crude.”

    Nigerian crude output has tumbled as militants resumed blowing up the pipelines that crisscross the mangrove swamps of the Niger River delta, ending years of relative peace. A wave of attacks this month is pushing production to a 27-year low of 700,000 million barrels a day.

    “The new wrinkle is Nigeria,” said John Kilduff, a partner at Again Capital LLC in New York. “It’s been a long time since we’ve worried about the supply of West African crude.”

    The Canadian wildfire doubled to an area more than five times bigger than New York City in about a week, threatening oil-sands mines. More than 80,000 people around Fort McMurray in northern Alberta fled the inferno earlier in the month, and the industry shut down more than 1 million barrels a day of output. Cooler weather is now helping to control the blaze.

    Meanwhile  Saudi Aramco, the world’s largest oil exporter, lowered the pricing terms for Arab Light sold to Asia by the most in 10 months as refineries grapple with falling margins and oversupply.

    State-owned Saudi Arabian Oil Co. said Sunday it will sell cargoes of Arab Light in September at $1.10 a barrel below Asia’s regional benchmark. That is a pricing cut of $1.30 from August, the biggest drop since November, according to data compiled by Bloomberg. The company was expected to lower the pricing by $1 a barrel, according to the median estimate in a Bloomberg survey of eight refiners and traders.

    Aramco’s pricing cut is part of a “market share battle” for Asian customers, particularly with OPEC rival Iran which is ramping up crude exports after sanctions eased in January, John Kilduff, partner at Again Capital LLC in New York, said by phone on Sunday. Refineries in China “bought a lot of extra crude earlier this year when prices were lower, so they’re going to have to work that off,” he said.

    Refineries from Singapore to China and South Korea are cutting operating rates amid a slump in margins and rising supply from state-owned giants such as China Petroleum and Chemical Corp. In China, independent refiners are operating at less than half their capacity at a six-month low, according to data compiled from Oilchem.net.

    Oil Prices

    All other official selling prices for Asian clients were reduced. The biggest cut was by $1.60 for Extra Light crude. Pricing for Light and Extra Light grades for U.S. clients was cut, by 20 cents and 40 cents, respectively, while the Medium and Heavy grades were unchanged. Aramco raised the pricing of all grades except Extra Light to northwest Europe and the Mediterranean.

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