Crude oil gains over 1%, ends losing streak on tightening supplies

Crude oil prices rose a dollar a barrel on Monday after three straight sessions of declines, boosted by the prospect of tightening supplies in Canada and elsewhere, although recession fears kept pressuring the market.

Brent crude futures rose $1.06, or 1.4% to settle at $75.23 a barrel. U.S. West Texas Intermediate crude settled at $71.11 a barrel, up $1.07, or 1.5%.

Wildfires raged in Alberta, Canada, shutting in large amounts of crude supply, and prices rose on fears they could worsen, said Mizuho analyst Robert Yawger.

At least 300,000 barrels of oil equivalent per day (boepd) production was shut in last week in Alberta. In 2016, wildfires knocked more than a million boepd of production offline there.

Global crude supplies could also tighten in the second half as OPEC+ - the Organization of the Petroleum Exporting Countries and allies including Russia - plan additional output cuts.

"The OPEC+ cuts are likely to have a greater impact as we move through the summer, as previous attempts to balance the markets were offset by seasonal weakness and the release of strategic reserves," said Third Bridge analyst Peter McNally.

The U.S. could start repurchasing oil for the Strategic Petroleum Reserve after completing a congressionally mandated sale in June, Energy Secretary Jennifer Granholm told lawmakers on Thursday.

Fears of a slowdown in the global economy limited gains in oil prices.

Last week, oil benchmarks fell for a fourth consecutive week, the longest streak of weekly declines since September 2022, over fears of a U.S. recession and risks of a historic default on government debt in early June.

"If credit conditions ease over the coming months, allaying economic fears for the world's largest economy, oil prices could bounce back without assistance but it seems a little premature at this point," said OANDA analyst Craig Erlam.