* Market weighs Canada supply loss vs already bullish bets
on oil
* Fresh Cushing build of 1.4 mln bbls adds to bearish
sentiment
* New Saudi energy minister role underscores lack of price
support
(New throughout, updating prices and market activity to U.S.
session; changes byline and dateline, previous LONDON)
By Barani Krishnan
NEW YORK, May 9 (Reuters) - Oil prices fell 2 percent or
more on Monday after traders took in their stride the impact of
wildfires on Canada's oil output and after another inventory
build at the U.S. hub for crude futures.
The market rallied 2 percent earlier in the session as
investors considered the daily loss of more than 1 million
barrels per day in Canadian supply. Almost all of Canada's crude
from oil sands is exported to the United States.
But with speculators already holding the largest number of
wagers for a hike in U.S. crude's West Texas Intermediate
futures CLc1 since last summer and near-record high bullish
bets on Brent LCOc1 , the scope for further gains was limited
without clarity on the extent of damage to oil facilities or
supply outages, analysts said.
Oil prices have risen more than 70 percent since hitting
12-year lows of around $27 or lower in the first quarter,
supported by falling U.S. production, unexpected supply
constraints in Libya and the Americas as well as a weaker
dollar.
Adding to Monday's bearish sentiment was market intelligence
firm Genscape's report of an inventory build of 1.4 million
barrels at the Cushing, Oklahoma delivery hub for WTI futures.
"Positioning has been already very stretched in the oil
market ... Some must have taken the opportunity to exit, so
that's one angle that momentum is slowing down," Barclays (LON:BARC)
Capital commodities strategist Miswin Mahesh said.
WTI CLc1 was trading 73 cents, or 1.6 percent, lower at
$43.93 a barrel by 10:53 a.m. EDT (1453 GMT). It had rallied as
much as $1.28 in Asian trading.
Brent LCOc1 fell $1.10, or 2.4 percent, to $44.27, after
hitting $46.48 earlier.
WTI, which usually trades at a discount to Brent
CL-LCO1=R , briefly flip to a 17 cent premium earlier in the
session.
Prices saw also brief support after Goldman Sachs (NYSE:GS) said it
held a long-term view of $50-$60 for WTI.
Markets were also watching Saudi Arabia, the world's biggest
oil exporter, where a government shake-up over the weekend
included the appointment of Khalid al-Falih as head of the new
Ministry of Energy, Industry and Mineral Resources.
"Changes in Saudi Arabia oil leadership only underscore the
shift in strategy to one focused on market share over price,"
Morgan Stanley (NYSE:MS) said.
Some analysts said the wildfire could still be a supportive
factor, with officials saying resuming operations would be a
challenge and no timeline had been conceived.
"This production is not gone for good, yet when fires are
controlled, restarting production will take several more weeks,
even without damage," energy analysts at Morgan Stanley said in
a note.
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TAKE A LOOK-Canada getting handle on Alberta wildfire, no
restart yet for oil operations
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