Crude oil prices were on the rise on Monday as the market continued to fear a tightening of crude supplies on Canadian wildfires.
Crude oil prices were trading up 1.5% on Monday afternoon, with WTI trading at $71.12 per barrel, up $1.08 per barrel (+1.54%) as the oil-producing province of Alberta sees more hot and dry weather, triggering an increase in wildfires, with no sign of abating.
The number of wildfires labeled as out of control as of Saturday is 21, with more than 16,000 people displaced.
There still were more than 300,000 boepd of Canadian oil production shut in due to the fires.
“Our peak burning period, which is when the temperatures are at the highest and the fuels are at their driest, is still in front of us,” Alberta Wildfires official Josee St-Onge said on Sunday afternoon. “It’s too soon to say when we’re going to see the peak of this wildfire season.”
St. Onge added that Alberta would “continue to be challenged.”
Brent crude oil prices were also trading up $1.06 per barrel, at $75.23 per barrel (+1.43%).
In the United States, crude oil inventories are 1% below the five year average for this time of year at 462.6 million barrels.
The market is also eyeing OPEC+’s production cut plans which were set to go into effect as of May 1, with speculation that the group would continue to cut production to bolster prices.
Meanwhile, fears of a recession are capping the price gains for oil as discussions around the U.S. borrowing cap limit have so far failed to resolve.
The Treasury could run out of funds to make payments on its debt, resulting in significant losses in production and jobs.
