Oil Prices Edge Up Amid Supply Disruptions and Strong Demand
Oil Prices Rise
Oil prices saw an uptick on Tuesday, buoyed by operational disruptions, robust demand, and voluntary output cuts, signaling a potential tightening of the supply-demand balance.
Price Movements
U.S. West Texas Intermediate (WTI) crude futures climbed by 18 cents, reaching $79.30 a barrel by 1224 GMT.
Brent crude futures also experienced gains, rising by 19 cents to hit $83.55 a barrel.
Factors Driving the Market
Wildfires in Canada
The market is closely monitoring wildfires in remote western Canada, which pose a risk of disrupting the country's oil supply. Firefighters are working to contain blazes in British Columbia and Alberta, areas near the heart of Canada's oil sands industry. While no operational disruptions have been reported yet, analysts warn that Canada's production capacity of 3.3 million barrels per day could be affected.
Improving Demand
Oil prices received support from improving demand, particularly from the U.S. and China. U.S. motorist group AAA forecasts a surge in road trips over the upcoming Labour Day weekend, reaching the highest level since 2000. Additionally, Chinese data revealed consumer prices rising for the third consecutive month, indicating robust demand.
Iraq's Output Policy: Bullish comments from Iraq's oil minister, Hayyan Abdul Ghani, also influenced market sentiment. Ghani stated that Iraq would uphold voluntary output cuts agreed upon by OPEC+ members at the upcoming meeting on June 1. This statement contradicted his earlier remarks suggesting Iraq's reluctance to agree to new output cuts.
