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Oil Up $1 on Tight US Supply, China Demand

Gas prices are seen at a gas station in Los Angeles on September 28, 2023. California gas prices are nearing USD $7 per gallon in some locations as oil prices surge toward $100 a barrel. (Photo by Robyn Beck / AFP)
Gas prices are seen at a gas station in Los Angeles on September 28, 2023. California gas prices are nearing USD $7 per gallon in some locations as oil prices surge toward $100 a barrel. (Photo by Robyn Beck / AFP)
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Oil Up $1 on Tight US Supply, China Demand

Gas prices are seen at a gas station in Los Angeles on September 28, 2023. California gas prices are nearing USD $7 per gallon in some locations as oil prices surge toward $100 a barrel. (Photo by Robyn Beck / AFP)
Gas prices are seen at a gas station in Los Angeles on September 28, 2023. California gas prices are nearing USD $7 per gallon in some locations as oil prices surge toward $100 a barrel. (Photo by Robyn Beck / AFP)

Oil prices rose on Friday and were headed for a gain of about 3% for the week, driven by tight US supply and expectations of strong fuel demand in China during the Golden Week holiday.

US West Texas Intermediate crude (WTI) was up $1.31, or 1.43%, to $93.02 per barrel at 1208 GMT.

Front-month Brent November futures were up 88 cents, or 0.92%, at $96.26 per barrel ahead of the contract's expiry later in the day. The more-liquid Brent December contract was up 97 cents, or 1.04%, at $94.07 per barrel.

A backdrop of tight supplies in the US provided further price support, with storage at Cushing, Oklahoma, the delivery point for US crude futures, already at its lowest since July 2022.

"Any additional decline would threaten to bring them down to a critical level, which could make further withdrawals difficult," said Commerzbank analyst Carsten Fritsch.

China's fuel demand was set to firm as the week-long Golden Week holiday began on Friday.

"(An) increase in international travel during the Golden Week holiday is boosting Chinese oil demand," ANZ analysts said in a client note.

Domestic travel is also expected to boost demand, with data from flight app Umetrip showing the average number of daily flights booked is a fifth higher than for Golden Week in 2019, before COVID.

Meanwhile, inflation in the euro zone fell to a two-year low of 4.3% in September, the latest Eurostat flash reading showed, suggesting the European Central Bank's policy of steady interest rate hikes was taking effect.

Russia is considering introducing fuel export quotas if the current export ban is not effective in bringing down domestic prices.

Russian gasoline and diesel exchange prices on the St. Petersburg International Mercantile Exchange (SPIMEX) fell slightly on Friday.

Brent is forecast to average $89.85 a barrel in the fourth quarter, and $86.45 in 2024, according to a survey of 42 economists compiled by Reuters on Friday.

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Fire, Smoke Upend Western Canada’s Summer Tourism Season

A helicopter works a forest fire outside of Jasper, Alberta, Canada, on Friday July 26, 2024. (Reuters)
A helicopter works a forest fire outside of Jasper, Alberta, Canada, on Friday July 26, 2024. (Reuters)
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Fire, Smoke Upend Western Canada’s Summer Tourism Season

A helicopter works a forest fire outside of Jasper, Alberta, Canada, on Friday July 26, 2024. (Reuters)
A helicopter works a forest fire outside of Jasper, Alberta, Canada, on Friday July 26, 2024. (Reuters)

Severe wildfire seasons are increasingly hurting western Canada's lucrative tourism industry, with some visitors beginning to avoid the busy late-summer months due to concerns about uncontrolled blazes, smoke-filled skies and road closures.

After a scorching start to July, nearly 600 wildfires are now ablaze across British Columbia and Alberta, including a huge fire that this week devastated the picturesque tourist town of Jasper in the Canadian Rockies.

Dozens of communities, including popular holiday spots in British Columbia's Kootenay region, are under evacuation orders and several highways are closed.

This year's surge in wildfire activity comes after Canada endured its worst-ever year for wildfires in 2023, when more than 15 million hectares (37 million acres) burned, including parts of the city of West Kelowna in the heart of British Columbia's wine region.

Ellen Walker-Matthews, head of the Thompson Okanagan Tourism Association, said the industry was seeing a lot more last-minute travel decisions instead of booking in advance.

"It's a huge blow. July and August are traditionally the busiest months in the region," said Walker-Matthews, adding that while her region has been relatively unscathed by wildfires this summer, some visitors are choosing to avoid interior British Columbia altogether.

The members of the British Columbia Lodging and Campgrounds Association are reporting a 5-15% drop in bookings from a year ago, with the biggest declines coming from the hotter Okanagan and Cariboo regions, said Joss Penny, who heads the association.

"The concern is that this is something we have to live with and we have it every year now," said Penny.

Although wildfires in Canada's forests are natural and common, scientists say drier, hotter conditions fueled by climate change are leading to more volatile and frequent blazes.

'SMOKEY SKIES'

Some events, like the Salmon Arm Roots and Blues Festival, usually held in August, have now been rescheduled to earlier in the summer to avoid what is now seen as peak smoke season. The festival, which was cancelled last year due to nearby wildfires, was this year moved to July to benefit from "less smokey skies."

Wildfires and extreme climatic events are prompting tourists to "change their plans not just temporarily, but permanently," said Elizabeth Halpenny, a tourism researcher and professor at the University of Alberta, noting that seasonal workers in the sector are often the hardest hit as they have few protections during a bad season or amid a cataclysmic fire.

Tourism contributed C$7.2 billion to the British Columbia economy in 2022, and C$9.9 billion to Alberta in 2023, according to the latest government data.

Jasper National Park is one of Canada's premier tourist destinations, with more than 2 million visitors a year flocking to see its pristine mountain landscapes and abundant wildlife, including grizzly bears, moose and elk.

Kelly Torrens, vice-president of product at international tour company Kensington Tours, described western Canada as a bucket-list destination. But the company now has 49 trips that were supposed to pass through Jasper this season in limbo. Six others were forced to evacuate the park when the fire hit.

Parks Canada has cancelled all camping reservations within Jasper National Park until Aug. 6 and with potentially 50% of the town's structures destroyed by fire, the cleanup and rebuild could take years.

Halpenny is among those hedging their bets.

"I've booked a campsite stay in the mountain parks but at the same time, I booked a campsite out on the prairie somewhere and that's my backup plan because I don't want to miss out on my vacation with my family."