Oil prices surge on US demand boost, Canadian wildfire concerns
Date
5/15/2024 4:59:08 AM
(MENAFN) On Wednesday, both oil benchmarks experienced significant surges, driven by heightened demand in the United States, the largest consumer of oil globally, as well as apprehensions regarding potential disruptions to oil production regions stemming from wildfires ravaging parts of Canada.
At 10:39 AM local time (0739 GMT), the international benchmark brent crude traded at USD82.95 per barrel, marking a 0.69 percent increase from the previous session's closing price of USD82.38 per barrel. Simultaneously, the American benchmark West Texas Intermediate (WTI) saw a rise to USD78.62 per barrel, reflecting a 0.77 percent increase from its previous session's closing price of USD78.02 per barrel.
The American Petroleum Institute's prediction of a 3.10 million-barrel drop in US commercial crude oil stocks last week, surpassing the market's expectations of a 1.35 million-barrel decline, hinted at increased demand within the US market, further fueling the uptrend in oil prices.
Investors keenly awaited the release of official inventory data later in the day from the US Energy Information Administration, which was anticipated to offer valuable insights into stock levels and potentially impact market sentiment.
Additionally, the weakening of the US dollar against other major currencies contributed to the upward trajectory in oil prices. The US dollar index, which gauges the greenback's value relative to other currencies, registered a 0.12 percent decline to 104.765, potentially bolstering demand by making oil more affordable for holders of alternative currencies and traders.
Amidst these market dynamics, concerns persisted over the spread of wildfires in Canada to key oil-producing regions, heightening the risk of disruptions to supply chains and further driving up oil prices. The wildfires, which began over the weekend, continued to devastate vast swathes of land, prompting the evacuation of thousands of residents from their homes as authorities grappled with the challenge of containment.
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