Oil prices extend gains on US plans to refill reserve, Canada’s wildfires

Oil prices rose for a second day early on Tuesday, as U.S. plans to purchase oil for the Strategic Petroleum Reserve (SPR) lent support while raging wildfires in Canada fuelled supply worries.

Brent crude futures rose 31 cents, or 0.4%, to $75.54 a barrel by 0043 GMT, while U.S. West Texas Intermediate crude was at $71.38 a barrel, up 27 cents, or 0.4%.

Both benchmarks rose more than 1% on Monday, reversing a 3-session losing streak.

The U.S. Department of Energy said on Monday it would buy 3 million barrels of crude oil for the SPR for delivery in August, and asked that offers be submitted by May 31.

“The market got a boost from expectations that the U.S. repurchase of oil for the strategic reserve will continue if WTI prices fall near or below $70 a barrel,” said Toshitaka Tazawa, an analyst at Fujitomi Securities Co Ltd.

“Behind the gain was also bargain-hunting by some investors after the recent sharp declines,” he said.

Last week, Brent and WTI futures fell for a fourth straight week over fears of a U.S. recession and risks of a historic default on government debt in early June. The benchmarks last recorded a similar streak of weekly declines in September 2022.

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