Contact Us

Oil up with U.S. demand increase, supply concerns amid wildfires in Canada

Anadolu Agency ECONOMY
Published May 15,2024
(File Photo)

Both oil benchmarks surged on Wednesday with increased demand in the U.S., the world's largest oil-consuming country, and concerns of supply disruptions from Canadian wildfires spreading to oil production regions.

International benchmark Brent crude traded at $82.95 per barrel at 10.39 a.m. local time (0739 GMT), a rise of 0.69% from the closing price of $82.38 per barrel in the previous trading session.

American benchmark West Texas Intermediate (WTI) traded at $78.62 per barrel at the same time, a 0.77% increase from the previous session that closed at $78.02 per barrel.

The U.S. market had expected a decline in U.S. commercial crude oil stocks of 1.35 million barrels, but the American Petroleum Institute predicted a drop of 3.10 million barrels last week, which exceeded forecasts and indicated increased demand in the U.S.

Market players are awaiting the publication of official data later in the day from the U.S. Energy Information Administration on inventory stocks.

The weakening of the U.S. dollar against other currencies also aided the rise in prices. The U.S. dollar index, which measures the U.S. dollar's value against other currencies, fell 0.12% to 104.765.

A weaker dollar is anticipated to enhance demand by making oil cheaper for other currency holders and traders.

Concern about wildfires in Canada spreading to oil-producing regions is raising the risk of supply disruptions and driving up prices.

Uncontrollable forest fires in Canada, which started on Saturday, continue to affect thousands of acres of land, resulting in the evacuation of thousands of people from their homes.

Last year saw production cuts of 300,000 barrels per day due to forest fires in the country.

In addition, the prospects of global oil supply disruptions from conflicts both in the Middle East and the Red Sea, one of the world's most frequently used sea routes for oil and fuel shipments, continue to influence prices.

The Houthis have been targeting cargo ships in the Red Sea owned or operated by Israeli companies that are transporting goods to and from Israel in solidarity with Palestinians in the Gaza Strip.

Yemen's Houthi group said late Tuesday that the U.S. and UK conducted a fresh series of joint air strikes targeting Al Hudaydah airport in the west of the country.