Oil Rises As Biden Quits US Race, Blazes Threaten Canadian Wells
Oil edged higher — after slumping almost 3% on Friday — as investors weighed the fallout from President Joe Biden’s decision not to seek reelection, while wildfires menaced some production in Canada.
![<div class="paragraphs"><p>A Canadian Natural pumpjack near Fort St. John, British Columbia, Canada. Photographer: James MacDonald/Bloomberg</p></div>](https://media.assettype.com/bloombergquint%2F2024-07%2F6cb082a7-5ba3-4e82-a0e4-79343fe76bc2%2F_1x_1.jpg?auto=format%2Ccompress&w=200)
(Bloomberg) -- Oil edged higher — after slumping almost 3% on Friday — as investors weighed the fallout from President Joe Biden’s decision not to seek reelection, while wildfires menaced some production in Canada.
Global benchmark Brent rose toward $83 a barrel after posting its biggest one-day drop since early June, while West Texas Intermediate was near $81. Biden abandoned his bid for a second term as concern mounted he couldn’t beat Donald Trump, and endorsed Vice President Kamala Harris. The US dollar eased in Asian trading, benefiting commodities priced in the currency.
![Oil Rises As Biden Quits US Race, Blazes Threaten Canadian Wells](https://media.assettype.com/bloombergquint%2F2024-07%2Fd946db57-7683-4387-9183-5e30b44b290e%2F_1x_1.png?auto=format%2Ccompress)
In Canada, a blast of heat across the Alberta oil patch has triggered a wave of wildfires. An estimated 348,000 barrels a day of production are at risk, according to Alberta Wildfire and Alberta Energy Regulator data.
Oil has pushed higher this year as OPEC+ reined in output, setting the scene for a drawdown in global stockpiles over the northern hemisphere summer. Geopolitical tensions have also been to the fore, with Israel’s war against Hamas and clashes with Iran-backed groups including the Yemen-based Houthis sparking concerns of regional instability that could threaten supply.
At the weekend, Israel struck targets around the Houthi-held Red Sea port of Hodeidah in retaliation for a drone attack on Tel Aviv. The airstrikes were aimed at facilities including fuel-storage sites, with a Houthi-run television channel showing flames and smoke raging at the installations it said were hit.
Market metrics point to tight near-term conditions. Brent’s prompt spread — the difference between its two nearest contracts — was more than $1 a barrel in backwardation, a bullish pattern. Two weeks ago, the gap was 76 cents.
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