UPDATE 5-Oil falls 2 pct on fading supply disruptions, profit taking

Published 2016-06-30, 10:29 a/m
© Reuters.  UPDATE 5-Oil falls 2 pct on fading supply disruptions, profit taking
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* OPEC oil output hits record high in June
* Return of Nigerian supply could hit prices -Goldman
* Oil worker wage talks begin in Norway
* U.S. crude inventories fall 4.1 million barrels

(New throughout, adds quotes, updates prices, changes dateline;
previous LONDON)
By Devika Krishna Kumar
NEW YORK, June 30 (Reuters) - Oil fell more than 2 percent
on Thursday, pressured by returning Nigerian and Canadian output
after supply outages and as traders looked to book profits ahead
of the long holiday weekend in the United States.
Resurgent Nigerian supply will put pressure on prices,
Goldman Sachs (NYSE:GS) said, adding that outages caused by Canadian
wildfires would virtually end by September.
OPEC's oil output has risen in June to its highest in recent
history, a Reuters survey showed, helped by Nigeria's output
partially recovers from militant attacks and Iran and Gulf
members boost supplies.
Brent futures LCOc1 for August delivery, which expires on
Thursday, was down 97 cents a barrel at $49.64 by 10:12 a.m. EST
(1412 GMT). U.S. crude CLc1 fell $1.17 to $48.71.
The more active Brent contract for September delivery
LCOc2 traded at $50 a barrel. The global benchmark has risen
in the past two sessions, making up losses after a shock Britain
exit from the European Union rattled markets across the world.
"The spot Brent contract breached the psychological $50 a
barrel level yesterday and currently is still trading above this
level even with the market in the midst of a light round of
profit taking selling ahead of a long holiday weekend in the
U.S.," said Dominick Chirichella, senior partner at the Energy
Management Institute.
"U.S. trading liquidity is likely to start to decease as
early as this afternoon."
Prices found some support after market intelligence firm
Genscape reported an inventory drop of about 500,000 barrels at
the Cushing, Oklahoma delivery hub for U.S. West Texas
Intermediate (WTI) futures in the week to June 28, traders who
saw the data said.
U.S. and Brent crude have risen by more than 85 percent
since reaching 12-year lows early this year, supported by
expectations that a glut that has been weighing on prices since
2014 would start to ease spurred by unplanned losses from Canada
to Nigeria.
However, oil production in Nigeria has risen to about 1.9
million barrels per day (bpd) from 1.6 million, due to repairs
and a lack of new major attacks on pipelines in the Delta
region, the state oil company said on Monday.
"Short-term supply conditions look overwhelmingly bearish,"
said Georgi Slavov, global head of energy, iron ore and shipping
research at Marex Spectron, in a report on Wednesday.
Longer term though, economists and analysts say the global
oil markets will be broadly balanced as risks in countries such
as Venezuela could disrupt supply further.
In Norway, oil companies and trade unions began two-day wage
talks in a bid to avert a strike that would initially cut the
country's oil and gas output by 6 percent, the Norwegian Oil and
Gas Association said.
Steady declines in U.S. output is adding to the rebalancing.
U.S. crude stockpiles fell for a sixth consecutive week, the
U.S. Energy Information Administration reported on Wednesday.
EIA/S

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