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Oil prices up on wildfires in Canada, US inventories drawdown expectations

Wednesday,   15-May-2024   08:12 AM (IST)

Oil prices rose in early trade on Wednesday as large wildfires were threatening Canada's oil sands and as the market expected U.S. crude oil and gasoline inventories to show a drawdown later in the day. Brent crude futures were up 34 cents, or 0.4% at $82.71 a barrel. U.S. West Texas Intermediate crude futures (WTI) rose 38 cents, or 0.5%, to $78.39 a barrel by 0016 GMT. A large wildfire was approaching Fort McMurray, the hub for Canada's oil sands industry with production of around 3.3 million barrels per day, or two-thirds of the country's total output, and thousands in suburbs were told to evacuate. U.S. producer prices rose more than expected in April and, even if the prospect for rate cuts has become less certain, Federal Reserve Chair Jerome Powell said it remained unlikely the Fed would have to raise rates any further. U.S. consumer prices as well as U.S. crude oil and gasoline inventory data are both due on Wednesday. Market sources cited American Petroleum Institute's figures on Tuesday as saying U.S. crude oil and gasoline inventories fell last week. The API figures showed crude stocks were down by 3.104 million barrels in the week ended May 10, the sources said on condition of anonymity. Gasoline inventories fell by 1.269 million barrels, and distillates rose by 673,000 barrels. In the Middle East, Israeli tanks pushed deeper into Rafah in Gaza, reaching some residential areas where more than a million people had sought shelter, and its forces pounded the enclave's north in some of the fiercest attacks in months.