In Canada, a blast of heat across the Alberta oil patch has triggered a wave of wildfires. An estimated 348,000 barrels a day of production are at risk, according to Alberta Wildfire and Alberta Energy Regulator data.
Oil has pushed higher this year as OPEC+ reined in production, setting the scene for a drawdown in global stockpiles over the northern hemisphere summer. Geopolitical tensions have also been to the fore, with Israel’s war against Hamas and clashes with Iran-backed groups including the Yemen-based Houthis sparking concerns of regional instability that could threaten production.At the weekend, Israel struck targets around the Houthi-held Red Sea port of Hodeidah in retaliation for a drone attack on Tel Aviv. The airstrikes were aimed at facilities including fuel-storage sites, with a Houthi-run television channel showing flames and smoke raging at the installations it said were hit.
Market metrics point to tight near-term conditions. Brent’s prompt spread — the difference between its two nearest contracts — was more than $1 a barrel in backwardation, a bullish pattern. Two weeks ago, the gap was 76 cents.
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