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  • A massive wildfire that is still raging has forced almost 90,000 people to flee the West Canadian town of Fort McMurray,

  • and what is shaping up to be the country's costliest natural disaster.

  • Fortunately, there are no known casualties from the blaze at the moment,

  • but thousands of structures have been burned to the ground.

  • Now, there's also an economic impact.

  • Fort McMurray is the hub of Canada's oil sands industry.

  • The east fields produce around 2.3 million barrels a day of oil, more than half of Canada's entire output.

  • Canada produces about 4 and 1/2 million barrels a day of crude, of which about 3.4 million barrels is exported to the U.S. for a network of pipelines.

  • Well, the actual damage to the oil sands facilities at the moment is minimal.

  • Companies have been making sure they start from families to save, and inevitably that means there will be supply disruptions.

  • So what sort of numbers are we looking at?

  • Well, it's important to state at the moment that we don't have any verifiable figures.

  • But analysts reckon anything between 500,000 and 800,000 barrels a day of crude oil production could be forced offline because of the blaze.

  • Now this is based on comments that we've heard from oil companies operating in the region.

  • When wild fires had last spread across this part of Canada about a year ago,

  • around 300,000 barrels a day of production was knocked out, most of which returned by the middle of June.

  • But this blaze is much worse.

  • Well, one notable feature this year has been a string of unexpected supply disruptions,

  • of which the Canadian wild fires could be just the latest.

  • These disruptions have helped crude rally by more than 60% from its January lows.

  • At one point in April, more than 2.8 million barrels a day of global oil production was offline.

  • This helped tighten the market that was a ** supply.

A massive wildfire that is still raging has forced almost 90,000 people to flee the West Canadian town of Fort McMurray,

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B1 FinancialTimes oil blaze canada crude wildfire

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    Kristi Yang posted on 2016/05/09
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