Oil prices up on lingering threats to production

NEW YORK, May 10 (UPI) -- Militancy in the oil-rich Niger Delta and ongoing production outages in Canada helped lift crude oil prices higher in early Tuesday trading.

"It's not yet safe to return," Alberta Premier Rachel Notley said in the latest provincial update on fires raging through the Fort McMurray area. More than 750 square miles of land has burned and most oil companies said that, while the immediate threat is subsiding, their operations remain closed.

Nexen, a subsidiary of the China National Offshore Oil Corp., said the status of its facilities in the region is unknown.

Crude oil prices inched lower Monday after Canadian company Suncor noted fires were moving east and away from its facilities, though provincial authorities said they expected the blaze to spread Tuesday.

The price for Brent crude oil edged up 1.4 percent to start the day in New York at $44.27 per barrel. West Texas Intermediate, the U.S. benchmark for the price of oil, gained 0.3 percent to open at $43.59 per barrel.

According to S&P Global Platts, fires in Alberta, raging since May 1, have sidelined an estimated 1 million barrels per day in Canadian oil production, which could put pressure on a U.S. market that counts Canada as its No. 1 supplier.

Shortages in Canada had been offset by inventory builds elsewhere in the global energy market. Analysts surveyed by Platts said they expected U.S. crude oil stocks will show an increase of 300,000 barrels.

Pressure outside of North America, however, has emerged as militants force evacuations from the oil-rich Niger Delta. A group calling itself the Niger Delta Avengers has targeted oil installations in the region, forcing several international oil companies to curb production from Africa's largest oil producer.

Eugene Lindell, an analyst with JBC Energy in Vienna, was quoted by Nigerian newspaper Punch as saying chronic security issues in Nigeria are causing oil companies to reconsider their future.

"If it continues like this, there are companies who will probably not consider Nigeria," he said.