Oil prices rise on tighter supply outlook

Brent Crude Oil Price News: Oil prices rose on Tuesday as the supply-demand balance appeared to tighten due to operational disruptions, stronger demand and voluntary production cuts. U.S. West Texas Intermediate crude futures were up 18 cents at $79.30 a barrel by 1224 GMT. Brent crude futures gained 19 cents to settle at $83.55 a barrel.

The market is watching wildfires in far western Canada that could disrupt the country’s oil supply, Tony Sycamore, market analyst at IG, said in a note. As Canada’s wildfire season gets under way, firefighters were racing 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 bpd production capacity was “very likely to be affected.” Oil prices were up about 1 percent in the previous trading session on higher demand from the U.S. and China.

US motorists group AAA forecast that Labor Day road trips for the May 25-27 long weekend will rise to the highest level since 2000, while Chinese data over the weekend showed consumer prices rose for a third straight month .

The market also continued to react to upbeat comments from Iraqi Oil Minister Hayyan Abdul Ghani over the weekend, according to an ANZ analyst note. 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 enough voluntary cuts and would not agree to further production cuts.