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Wildfires in Canada shut in at least 300,000 boepd output
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Alberta fires expected to worsen, could knock off more
output
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US to refill SPR after last mandated sale in June
(New throughout, updates prices, market activity and comments
to settlement)
By Shariq Khan
BENGALURU, May 15 (Reuters) - Oil prices rose a dollar a
barrel on Monday after three straight sessions of declines,
boosted by the prospect of tightening supplies in Canada and
elsewhere, although recession fears kept pressuring the market.
Brent crude futures rose $1.06, or 1.4% to settle at
$75.23 a barrel. U.S. West Texas Intermediate crude settled at $71.11 a barrel, up $1.07, or 1.5%.
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.
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.
"The OPEC+ cuts are likely to have a greater impact as we
move through the summer, as previous attempts to balance the
markets were offset by seasonal weakness and the release of
strategic reserves," said Third Bridge analyst Peter McNally.
The U.S. could start repurchasing oil for the Strategic
Petroleum Reserve after completing a congressionally mandated
sale in June, Energy Secretary Jennifer Granholm told lawmakers
on Thursday.
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.
(Additional reporting by Noah Browning, Florence Tan and Mohi
Narayan; Editing by Kirsten Donovan, Mark Potter, David Gregorio
and Sharon Singleton)
