By Colleen Howe
BEIJING (Reuters) – Oil prices rose on Tuesday as the balance between supply and demand looked set to tighten due to operational disruptions, stronger demand and voluntary production cuts.
West Texas Intermediate crude futures rose 18 cents to $79.30 a barrel at 12:24 GMT. Brent crude futures rose 19 cents to $83.55 a barrel.
The market is watching wildfires in remote western Canada that could disrupt the country’s oil supply, Tony Sycamore, market analyst at IG, said in a note.
As wildfire season began in Canada, firefighters raced Monday to contain one blaze in British Columbia and two in Alberta, near the heart of the country’s oil sands industry. No operational disruptions were reported.
But Alex Hodes, an analyst at energy brokerage StoneX, said Canada’s 3.3 million barrels per day production capacity “will very likely be impacted.”
Oil prices rose around 1% in the previous trading session, due to improved demand from the US and China.
US auto group AAA forecast road travel from Labor Day to the May 25-27 long weekend to rise to the highest level since 2000, while Chinese data over the weekend showed that prices at consumer prices rose for the third consecutive month.
The market also continued to react to upbeat comments from Iraq’s oil minister Hayyan Abdul Ghani over the weekend, according to a note from ANZ analysts. Ghani said on Sunday that Iraq would honor voluntary production cuts made by OPEC+, which includes the Organization of the Petroleum Exporting Countries, Russia and other non-OPEC producers, at its next meeting on June 1.
That reversed course from his comments on Saturday that Iraq had made sufficient voluntary reductions and would not agree to any further production cuts.
(Reporting by Colleen Howe. Editing by Gerry Doyle)
