Oil prices rise on Canadian wildfires, US stock drawdown fears

15 May 2024 , 09:11 AM

Large wildfires that were threatening Canada’s oil sands and the market’s expectation that U.S. crude oil and petrol stockpiles would show a decrease later in the day contributed to an increase in oil prices in early trade on Wednesday.

At $82.71 per barrel, Brent crude futures were up 34 cents, or 0.4%. U.S. West Texas Intermediate crude futures (WTI) had increased 38 cents, or 0.5%, to $78.39 per barrel.

Thousands of people in the suburbs were ordered to evacuate as a sizable wildfire approached Fort McMurray, the centre of Canada’s oil sands industry, which produces about 3.3 million barrels per day, or two thirds of the nation’s entire output.

Although the likelihood of rate reduction has lessened, Federal Reserve Chair Jerome Powell stated it is still unlikely that the Fed will need to hike rates further despite the fact that U.S. producer prices increased more than anticipated in April.

On Wednesday, there will be data on petrol and crude oil inventories in the United States as well as consumer pricing. Market reports said on Tuesday that U.S. crude oil and petrol inventories decreased last week, citing data from the American Petroleum Institute.

According to the API data, there was a 3.104 million barrel decrease in crude stocks during the week ending May 10, according to anonymous sources. While distillates increased by 673,000 barrels, petrol inventories decreased by 1.269 million barrels.

In the Middle East, Israeli soldiers launched some of the most intense bombardment on the northern part of the enclave in months as Israeli tanks advanced farther into Rafah in Gaza, nearing some residential neighbourhoods where over a million Palestinians had taken refuge.

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