Oil Prices Surge on Supply Tightening in Canada, Global Economic Concerns

Oil prices rose a dollar a barrel on Monday on the prospect of tightening supplies in Canada and elsewhere, although recession fears kept pressuring the market.

Brent crude futures were up $1.23, or 1.7% to $75.40 a barrel at 1:14 p.m. EDT (1714 GMT). U.S. West Texas Intermediate crude was at $71.32 a barrel, up $1.28, or 1.8%.

Wildfires raged in Alberta, Canada, shutting in large amounts of crude supply, and prices rose on fears they could worsen, said Mizuho analyst Robert Yawger.

At least 300,000 barrels of oil equivalent per day (boepd) production was shut in last week in Alberta. In 2016, wildfires knocked more than a million boepd of production offline there.

Also supporting oil prices, the U.S. could start repurchasing oil for the Strategic Petroleum Reserve (SPR) after completing a congressionally mandated sale in June, Energy Secretary Jennifer Granholm told lawmakers on Thursday.

Global crude supplies could also tighten in the second half as OPEC+ – the Organization of the Petroleum Exporting Countries and allies including Russia – plan additional output cuts.

Flows of northern Iraqi crude oil to Turkey’s Ceyhan port have yet to resume following Baghdad’s request to restart them last week, industry sources said on Monday, helping to keep global supplies tight.

Fears of a slowdown in the global economy limited gains in oil prices.

Last week, oil benchmarks fell for a fourth consecutive week, the longest streak of weekly declines since September 2022, over fears of a U.S. recession and risks of a historic default on government debt in early June.

”If credit conditions ease over the coming months, allaying economic fears for the world’s largest economy, oil prices could bounce back without assistance but it seems a little premature at this point,” said OANDA analyst Craig Erlam.

(This story has not been edited by News18 staff and is published from a syndicated news agency feed)