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The outages start to hurt

The market has at last noticed the mounting supply-side problems, which are now pushing up oil prices

AFTER the failure of the Doha oil-producer meeting in April you might have thought crude prices would plummet. Saudi-Iranian rivalry has for now thwarted any attempt at capping Opec supply. But Brent futures rallied, rising from around $42.77 a barrel on 18 April – the day after the Doha meeting – to just under $49/b on 17 May. WTI has also strengthened, reaching more than $47/b in mid-May, up from around $30/b in January. Futures look certain soon to enjoy a $50 handle. An old market chestnut, seemingly forgotten in the glut, is the reason: unplanned production outages. Together, they have offset some of the effect of rising Opec supplies. Wildfires in Alberta took an estimated 1.2m b/d 

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