On Monday, oil prices increased by $1 per barrel due to the possibility of tighter supply in Canada and elsewhere, yet market pressure from recession worries persisted.
At 1:14 p.m. EDT (1714 GMT), Brent oil futures were up $1.23, or 1.7%, to $75.40 a barrel. U.S. West Texas Intermediate oil was up $1.28 or 1.8% to $71.32 a barrel.
According to Mizuho analyst Robert Yawger, while wildfires burned in Alberta, Canada, cutting off a significant portion of the petroleum supply, prices increased due to concerns that they would become worse.
Production of at least 300,000 boepd barrels of oil was halted in Alberta last week. More than a million boepd of production there was shut down in 2016 due to wildfires.
Energy Secretary Jennifer Granholm informed legislators on Thursday that the United States may begin repurchasing oil for the Strategic Petroleum Reserve (SPR) after completing a transaction required by Congress in June.
As OPEC+, the Organization of the Petroleum Exporting Countries and allies including Russia, prepare significant production cutbacks, the world's oil supplies may also become more scarce in the second half.
Following Baghdad's request to resume them last week, flows of crude oil from northern Iraq to Turkey's Ceyhan port have yet to begin, according to industry sources on Monday. This is keeping global supplies limited.
Gains in oil prices were constrained by concerns of a downturn in the world economy.
The longest run of weekly drops since September 2022 occurred last week as a result of worries about a U.S. recession and the possibility of an early-June historic default on government debt.
“Oil prices could bounce back without assistance but it seems a little premature at this point,” said OANDA analyst Craig Erlam. “If credit conditions ease over the coming months, allaying economic fears for the world's largest economy, it seems a little premature.”