2023-05-16 01:27:27
Oil prices rose for the second time early in the day on Tuesday, with U.S. plans to buy oil for the Strategic Petroleum Reserve (SPR) providing support, while raging wildfires in Canada fuel the supply concerns.
Brent rose 31 cents, or 0.4%, to $75.54 a barrel at 0043 GMT, while U.S. West Texas Intermediate was at $71.38 a barrel, up 27 cents, or 0, 4%.
Both benchmarks rose more than 1% on Monday, reversing a three-session losing streak.
The US Department of Energy said on Monday it would purchase 3 million barrels of crude oil for the SPR for delivery in August, and asked that proposals be submitted by May 31.
“The market has been buoyed by expectations that the U.S. oil buyback for the strategic reserve will continue if WTI prices fall near or below $70 a barrel,” said Toshitaka Tazawa, analyst at Fujitomi Securities Co Ltd.
“This rise is also due to some investors looking for bargains following the recent steep declines,” he added.
Last week, Brent and WTI futures fell for the fourth straight week on fears of a US recession and risks of a historic government debt default earlier this month. of June. The last time benchmarks recorded such a string of weekly declines was in September 2022.
On Tuesday, however, oil prices were supported by supply concerns related to the Canadian wildfires.
Extensive fires in Alberta, Canada, forced more than 30,000 people from their homes at one point and shut down at least 319,000 barrels of oil equivalent per day (boepd), or 3.7% of national production.
Global crude supply might also tighten in the second half of the year, with OPEC+ – the Organization of the Petroleum Exporting Countries and its allies including Russia – predicting further production cuts.
Meanwhile, U.S. oil production from the seven largest shale basins is expected to rise in June to the highest level on record, according to data from the Energy Information Administration. Administration).
The new management of Venezuela’s national energy company PDVSA plans to increase the country’s oil production to 1.17 million barrels per day (bpd) by the end of the year, while increasing the activities of refining and exploration, according to an internal planning document. (Reporting by Yuka Obayashi; Writing by Himani Sarkar)
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