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CORRECTED-UPDATE 4-Oil falls below $50 on higher supply outlook, economic worries

Published 2016-06-30, 09:13 a/m
© Reuters.  CORRECTED-UPDATE 4-Oil falls below $50 on higher supply outlook, economic worries
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(Corrects potential Norwegian output disruption paragraph 13)
* Oil worker wage talks begin in Norway
* Return of Nigerian supply could hit prices -Goldman
* Brexit, slowing Asia, darken economic outlook
* U.S. crude inventories fall 4.1 million barrels

By Alex Lawler and Dmitry Zhdannikov
LONDON, June 30 (Reuters) - Oil fell below $50 a barrel on
Thursday, pressured by higher Nigerian output and concern about
the economic outlook following Britain's vote to leave the
European Union last week.
Returning Nigerian supply will put pressure on prices,
Goldman Sachs (NYSE:GS) said, adding that outages caused by Canadian
wildfires would virtually end by September.
Norwegian supply could be hit by a threatened workers'
strike, however.
Brent crude LCOc1 was down 88 cents a barrel at $49.73 as
of 1242 GMT, having risen in the two previous sessions. U.S.
crude CLc1 was down $1.02 to $48.86.
"Supply is gradually improving in Canada, although in Norway
we still have some risk," said Olivier Jakob of Petromatrix, who
added a weak gasoline refining margin was weighing on crude.
"I don't think the case is there for $30 oil, but to go to
$60 you need to see stronger support from the
(refined)products."
Brent has risen by 85 percent since reaching a 12-year low
in January, supported by expectations that a glut that has been
weighing on prices since 2014 would start to ease and by
unplanned losses from Canada to Nigeria.
"We have a large overhang of surplus stock to work off and
that will take some time as well. I'd imagine that over time you
will see more upward pressure than downward pressure on prices,"
said Royal Dutch Shell's RDSa.L chief executive Ben van
Beurden.
Nonetheless, the return of some of that oil and concern over
a slowing economy, compounded by Britain's vote to leave the
European Union, are weighing near-term, analysts said. KEMP/
Adding to economic concerns, industrial output in Asia's
second-largest economy, Japan, slid in May at the fastest rate
in three months to its lowest level since June 2013.

On the supply front, 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.
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.
Oil gained some support from tightening supplies in the
United States. 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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