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Oil extends drop as Canada seeks to resume production

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Oil dropped for a fourth day as producers in Canada worked to resume operations after wildfires curbed output and Iran continued to raise exports amid a global surplus.
July futures slid as much as 1.5 percent in New York. Cooler weather is helping to control a blaze in the heart of Canada’s oil-sands region and allowing Suncor Energy Inc. and Syncrude Canada Ltd. to start getting back to work.
Exports from Iran could surpass 2.2 million barrels a day by midsummer, the state oil company told the Mehr news agency.
Oil has surged more than 80 percent from a 12-year low earlier this year on signs the global surplus will ease as non-OPEC output declines.
The Organization of Petroleum Exporting Countries is unlikely to set a production target when it meets June 2 as it sticks with Saudi Arabia’s strategy to squeeze out rivals, according to all but one of 27 analysts surveyed by Bloomberg.
“The recent crop of short-term outages has turned a significant second-quarter surplus into one more finely balanced, but not into deficit,” David Hufton, chief executive officer of brokers PVM Group in London, said in a report.

Canada Fire
West Texas Intermediate for July delivery fell as much as 74 cents to $47.67 a barrel on the New York Mercantile Exchange and was at $47.93 as of 9:35 a.m. London time. The front-month June contract expired Friday after dropping 41 cents to $47.75, capping a 1.2 percent decline over three sessions. Total volume traded Monday was 27 percent below the 100-day average.
Brent for July settlement slipped 41 cents to $48.31 a barrel on the London-based ICE Futures Europe exchange, trading at a premium of 38 cents to WTI.
Municipal authorities in Alberta, citing improved conditions late on Friday, lifted mandatory evacuation orders for seven oil-sands worker camps and production facilities, including Suncor’s base plant mine and Syncrude’s Mildred Lake
More than 1 million barrels a day were halted by a wildfire that’s ravaged the region since the start of May.
In Iran, National Iranian Oil Co. Managing Director Rokneddin Javadi told Mehr that the country has no plans to join any attempt by global oil producers to freeze output since it’s still ramping up exports to pre-sanctions levels. Iran is due to meet with other OPEC members at the June 2 summit.

Oil-market news:
Nigerian militants the Movement for the Emancipation of the Niger Delta continued to observe a cease-fire and condemned the activities of a group known as the Niger Delta Avengers, which has led a campaign cutting the nation’s output to the lowest since 1994. Speculators’ net-long position in WTI has climbed by the most contracts since March, according to data from the Commodity Futures Trading Commission. Rigs targeting crude in the U.S. remained unchanged at 318 last week, according to Baker Hughes Inc.

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