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Oil deficit dalliance seen ending as disrupted crude returns

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Oil deficit dalliance seen ending as disrupted crude returns

By BEN SHARPLES on 7/4/2016

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NEW YORK (Bloomberg) -- The oil market surplus that vanished last quarter, helping prices post the best quarter in seven years, may return as early as this month as disrupted supply starts to pump again.

Canadian output returning from outages caused by wildfires will be enough to put the market back into oversupply and oil may return to a trading range of $30 to $50, according to Morgan Stanley. Goldman Sachs Group Inc. said that a recovery in Nigerian production is a risk to its $50/bbl forecast for the second half of 2016. The bank said earlier that the market had switched to deficit in May.

Brent oil has surged about 80% from a 12-year low in January as wildfires in Canada and attacks in Nigeria helped ease a global glut. The benchmark grade was trading at $50.58/bbl at 10:45 a.m. in London. Though U.S. production has slipped to the lowest since September 2014, shale drillers are bringing rigs back online as confidence in a stabilized market is prompting talk of expansion throughout 2016.

http://www.worldoil.com/news/2016/7/4/oil-deficit-dalliance-seen-ending-as-disrupted-crude-returns

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