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

Published 01/07/2016, 12:29 am
Updated 01/07/2016, 12:30 am
© 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. 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. 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. 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. 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. 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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