Gasoline price today (May 16): Turning around to accelerate

World oil prices

Oil prices ended the week up $1 after three straight sessions of declines. The rebound in oil prices was driven by the prospect of tightening supplies in Canada and elsewhere, although concerns about an economic slowdown continued to weigh on the market.

Brent crude for July delivery rose $1.06, or 1.4%, to $75.23 a barrel. U.S. West Texas Intermediate (WTI) crude settled at $71.11 a barrel, up $1.07, or 1.5%.

Wildfires raging in Alberta, Canada, have taken a large amount of crude oil off the market, pushing oil prices higher on concerns that the situation could get worse, said Robert Yawger, an analyst at Mizuho.

According to Reuters , wildfires in Alberta have disrupted the production of at least 300,000 barrels of oil per day. In 2016, wildfires disrupted the production of more than 1 million barrels of oil.

Global crude supplies could also tighten in the second half of the year as OPEC+ plans additional production cuts.

“OPEC+ production cuts could have a bigger impact as we move through the summer, as previous efforts to balance the market have been offset by seasonal weakness and releases from strategic oil reserves,” said Peter McNally, an analyst at Third Bridge.

Last Thursday, US Energy Secretary Jennifer Granholm told lawmakers that the US could begin buying additional oil for the strategic petroleum reserve after completing mandatory oil sales this June.

Concerns about a global economic slowdown have limited oil prices' gains.

Last week, both Brent and WTI crude fell for a fourth consecutive week, the longest weekly losing streak since September 2022, due to concerns about the US economic recession and the risk of a historic US government debt default in early June.

“If credit conditions ease in the coming months, easing economic concerns for the world’s largest economy, oil prices could recover without support but that seems a bit premature at this point,” said OANDA analyst Craig Erlam.

Oil prices started the week lower, extending last week’s slide before accelerating later in the session. US West Texas Intermediate (WTI) crude fell below $70 a barrel as concerns about a possible US debt default continued to mount while Congress was still negotiating the debt ceiling. The current US debt ceiling is $31.4 trillion.

“The sentiment in the oil market remains negative with the uncertain demand outlook and concerns over the US debt ceiling,” Warren Patterson, head of commodity strategy at ING Groep, told Bloomberg . “The market will likely pay attention to any potential demand adjustments in the IEA’s monthly market report,” Patterson said.

Oil has lost about 13% of its value since the beginning of the year, according to Bloomberg .