Oil rose for the second day at the beginning of trading on Tuesday, as prices received support from the United States' plans to buy oil for the Strategic Petroleum Reserve while wildfires in Canada heightened supply concerns.
Brent crude futures increased by 31 cents, or 0.4 percent, to $75.54 per barrel by 00:43 GMT, while U.S. West Texas Intermediate crude was priced at $71.38 per barrel, up 27 cents, or 0.4 percent.
Both benchmark indexes rose more than one percent on Monday, ending a three-session losing streak. The U.S. Department of Energy announced on Monday that it would purchase three million barrels of crude oil for the Strategic Petroleum Reserve for delivery in August, with bids due by May 31.
Toshitaka Tazawa, an analyst at Fujitomi Securities, noted that "the market received a boost from expectations that the U.S. repurchase of oil for the Strategic Reserve will continue if West Texas Intermediate crude oil prices fall near or below $70 per barrel." He added, "The gains are also attributed to some investors seeking bargains after recent sharp declines."
However, oil prices on Tuesday received support from supply concerns due to wildfires in Canada. Widespread fires in Alberta have forced more than 30,000 people to evacuate their homes and halted production of at least 319,000 barrels of oil equivalent per day, or 3.7 percent of national output.
Global crude supplies may also shrink in the second half of the year, as the OPEC+ coalition, which includes the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, is planning further production cuts.
On the other hand, data from the Energy Information Administration indicated that U.S. oil production from the seven largest shale basins is expected to rise in June to an all-time high.
In Venezuela, an internal planning document revealed that the new management of the state-owned energy company Petróleos de Venezuela anticipates increasing the country's oil production to 1.17 million barrels per day by the end of the year, boosted by increased refining and exploration activities.
