Oil prices fell 2 per cent on Monday after traders took in the impact of wildfires on Canada’s oil output and after another inventory build-up at a US hub for crude futures.

The market rallied 2 per cent earlier in the session as investors considered the daily loss of more than a million barrels in Canadian supply. Almost all of Canada’s crude from oil sands is exported to the US.

Yet with speculators already holding the most wagers for a rise in US crude's West Texas Intermediate (WTI) futures since last summer and near record high bullish bets on Brent, the scope for further gains was limited, analysts said.

WTI was trading 73 cents, or 1.6 per cent, lower at $43.93 a barrel by yesterday afternoon in European trading.

Brent fell $1.10, or 2.4 per cent, to $44.27 after hitting $46.48 earlier. – (Reuters)