DTN Oil Update
Oil Rises as Supply Outages, Geopolitics Offset Macro Data
VIENNA (DTN) -- Oil futures rose Tuesday morning as wildfires in Alberta continued to rage, shutting in some 344,000 barrels per day (bpd) in heavy sour crude oil production. The first operations were halted late last week, and several operators had to postpone the restart of production due to fire hazards. Read more about the wildfires here: https://www.dtnpf.com/… . Fruitless Russia-Ukrainian truce talks further lent support to oil prices.
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NYMEX-traded WTI for July delivery was up $0.60 barrel (bbl) to trade near $63.12 bbl, and ICE Brent for August delivery rose $0.54 bbl to $65.17 bbl.
July RBOB gasoline futures increased $0.0139 to $2.0664 gallon, while the front-month ULSD futures contract gained $0.0303 to $2.0748 gallon.
The U.S. dollar index strengthened by 0.485 points to 99.120.
The temporary loss of Canadian oil amounted to 344,500 bpd as of Tuesday morning, or 84% of the OPEC output hike expected this month. Producers in the Alberta oil sands, however, expected a return of operations in the coming days or weeks.
Rumors of a large output hike by OPEC led to a sizable increase in bearish bets on oil futures, before prices jumped on OPEC's decision to stick to the largely expected 411,000-bpd increase. Extensive military operations in the ongoing Russia-Ukrainian war over the weekend, meanwhile, added to geopolitical supply risks, which were exacerbated by Monday's negotiations in Istanbul ending after only one hour with the parties' demands remaining unchanged.
The Institute of Supply Management's U.S. manufacturing PMI, released Monday, showed the contraction in the sector continuing into May. At 48.5, it was the third consecutive monthly sub-50 reading and the lowest since February. The Caixin manufacturing PMI for May, meanwhile, indicated Chinese manufacturing contracting at the fastest rate since late 2022 at 48.3. The first sub-50 reading since September came on the back of falling new orders and foreign sales, likely a consequence of heightened tariff uncertainty.