Key US oil market gauges strengthen amid threat of reduced supplies from Canada

Key indicators of the US oil market are rising rapidly amid wildfires sweeping through Canada. These natural disasters threaten to reduce supplies to US storage facilities, which would limit the impact of increased supply from OPEC+, Bloomberg reports.

According to the news agency, traders are expecting demand to exceed supply in the near future. This is evident from the widening spread between July and August West Texas Intermediate oil contracts, which has reached its highest level since January.

The increase is due to weaker expectations of an oil surplus in the market. Wildfires in Canada are disrupting the production of nearly 350,000 barrels of crude oil per day. This could limit supplies to storage facilities in Cushing, Oklahoma, as well as to export terminals on the US Gulf Coast.

Bridgeton Research Group reports that commodity trading advisors are further strengthening the current WTI spread by increasing their positions. Another indicator, the so-called WTI cash roll, which reflects how much traders are willing to pay to roll their positions from one month to the next, was $1.30 per barrel on Friday. According to Link Data Services, this is the highest figure since the end of April.