WTI oil price continued its hot streak today finishing the day up 1.82% at $48.59 per barrel. Uncontrolled forest fires in Canada have suppressed the supply of oil coming from that market, more than one million barrels have yet to return to market.
The fires in Canada is the latest in a string of supply disruptions curtailing oil coming to market all around the globe. Production in the U.S. has continued to decline and pipeline outages in Nigeria have impacted supply from the central African country.
The Canadian fires show no sign of letting up any time soon. More than 8,000 oil workers were evacuated on Tuesday from the area. The implication is that the danger continues and shows no signs of letting up any time soon. Oil workers had been allowed to remain in the area for the last two weeks in hope that the fire would relent and workers could return the operations that were shut down earlier this month.
The upward move over the last two weeks has set in place yet another high oil price for 2016. Prices have continued to rally after falling to a thirteen year low in February following increasing supply concerns, oil price is now up 85% over the past three months. Despite the continued upward trend, the mentality remains decidedly bullish among investors.
As oil approaches the $50 mark, producers will likely put rigs back to work and push up the production levels. This will provide the next test for oil prices as increased production will come to market. Oil inventory levels will make news late Tuesday and Wednesday morning, an inventory draw could push the price over $50 this week.
