Oil prices fall as Canada production resumes after wildfires

Oil dropped for a fourth day as producers in Canada started the process of resuming operations after wildfires crimped output and as Iran continued to boost exports amid a glut.

July futures slid as much as 1.1 per cent in New York. Cooler weather is helping to control a blaze in the heart of the nation's oil-sands region and allowing Suncor Energy and Syncrude Canada to start getting back to work.

Exports from Iran could surpass 2.2 million barrels a day by mid-summer, the head of National Iranian Oil said, according to the Mehr news agency.

Oil has surged more than 80 per cent from a 12-year low earlier this year on signs the global surplus will ease as US output declines.

The Organisation of Petroleum Exporting Countries is unlikely to set a production target when the group meets June 2nd as it sticks with Saudi Arabia's strategy to squeeze out rivals, according to all but 1 of 27 analysts surveyed by Bloomberg.

"Outages from Canada to Nigeria have helped boost oil and the question is how long those disruptions will last," Evan Lucas, a market strategist at IG in Melbourne, said.

“Oil has moved up quickly and we’ll probably see a correction over the next couple of months.”

West Texas Intermediate for July delivery slid as much as 55 cents to $47.86 a barrel on the New York Mercantile Exchange and was at $47.92 by 2pm Hong Kong time.

The front-month June contract expired Friday after losing 41 cents to close at $47.75, capping a 1.2 per cent decline over three sessions.

Total volume traded was 35 per cent below the 100-day average. Canada FireBrent for July settlement was 44 cents lower at $48.28 a barrel on the London-based ICE Futures Europe exchange.

The contract decreased 9 cents to close at $48.72 on Friday. The global benchmark was at a premium of 39 cents to WTI.

Municipal authorities, citing improved conditions late on Friday, lifted mandatory evacuation orders for seven oil-sands worker accommodation camps and production facilities in Alberta, including Suncor's base plant mine and Syncrude's Mildred Lake mine.

More than 1 million barrels a day of output was taken off line by a wildfire that has ravaged the region since the start of May.

- Bloomberg