Oil prices surge amid threat of Canadian bushfires, expected drop in U.S. inventories


(MENAFN) In the early hours of Wednesday's trading session, oil prices experienced an uptick, largely driven by concerns over major forest fires encroaching upon Canada's oil sands region and market expectations of a decrease in US crude oil and gasoline inventories. Brent crude futures saw an increase of 60 cents, reaching USD82.99 per barrel, while US West Texas Intermediate crude futures climbed by 67 cents to USD78.73 a barrel.

Of particular concern was a significant forest fire nearing Fort McMurray, the heart of Canada's oil sands industry, which accounts for approximately 3.3 million barrels per day, constituting two-thirds of the nation's total production. As the flames advanced, thousands of residents in surrounding suburbs were urged to evacuate, underscoring the potential impact on oil production and infrastructure.

In the United States, the release of April's consumer price data and inventory figures for crude oil and gasoline added to market dynamics. While US producer prices experienced a higher-than-expected rise, Federal Reserve Chairman Jerome Powell's remarks tempered expectations of imminent interest rate cuts, indicating a cautious approach to monetary policy adjustments.

Anticipation mounted as investors awaited the latest data on US crude oil and gasoline inventories, scheduled for release on Wednesday. Preliminary figures from the American Petroleum Institute indicated a decline in inventories for the week ending May 10, with crude stocks decreasing by 3.104 million barrels and gasoline stocks dropping by 1.269 million barrels, while distillate stocks saw a modest increase of 673 thousand barrels.

Meanwhile, developments in the Middle East added to geopolitical tensions, as Israeli tanks reportedly penetrated Rafah, Gaza, reaching residential areas where a significant population sought refuge. Concurrently, Israeli forces conducted airstrikes in the northern Gaza Strip, marking some of the most intense attacks in recent months and exacerbating regional instability.

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