Recent fluctuation of oil prices mainly affected by the huge wildfire in Canada's oil sand region and the government shake-up in Saudi Arabia.
During last weekend, Canadian officials showed that the fire had ripped through 161,000 hectares (395,000 acres) forest and damaged homes in Fort McMurray, Alberta, the center of Canada's oil sands region, and the fire would likely to grow overnight. According to Reuter`s estimate, the wildfire has knocked out about half of the crude output from the sands, or 1 million barrels per day. The lost capacity is equivalent to around one third of the country's oil sands production, which contributed to a significant tightening of markets.
Meanwhile, Saudi Arabia, the world's biggest oil exporter, went ahead a far-reaching government shake-up during last weekend, including to a barrage of proposals aimed at overhauling the economy and convincing legions of young people that change is coming to the conservative kingdom. Khalid al-Falih, head of a new super Ministry of Energy, Industry and Mineral Resources, is a believer of reform and low oil prices. He said on last weekend that "Saudi Arabia will maintain its stable petroleum policies. We remain committed to maintaining our role in international energy markets and strengthening our position as the world's most reliable supplier of energy. We are committed to meeting existing and additional hydrocarbons demand from our expanding global customer base, backed by our current maximum sustainable capacity."
These two factors, together with the continuing crude imports rise in China, send oil prices soared more than 2% on Sunday night in Asian and European`s trading hours. The June Nymex contract neared $46 a barrel and Brent hit an intraday high of $46.48.
However, things go to different in the United States as the Canada began to control fires and the damage to production facilities have been limited. Both major contracts fell in Monday morning`s trading in the United States. The U.S. benchmark was down 1.4% at $44.03 a barrel on the New York Mercantile Exchange, and the global Brent contract was down 1.9% at $44.52 a barrel on the ICE Futures Europe exchange.
This turbulence and rise in the price of oil has benefitted another class of people in the oil industry, namely oil traders and especially those who bought CFDs in crude oil before the recent price rises. Whilst analysts think the market may now steady, there will still be probable price tremors for those wishing to take advantage of crude oil trading possibilities.