By Colleen Howe
BEIJING (Reuters) - Oil prices rose on Tuesday as the supply-demand balance looked set to tighten on operational disruptions, stronger demand and voluntary output cuts.
U.S. West Texas Intermediate crude futures rose 18 cents to $79.30 a barrel by 1224 GMT. Brent crude futures gained 19 cents, reaching $83.55 a barrel.
The market is watching wildfires in remote western Canada that could disrupt the country's oil supply, Tony Sycamore, market analyst with IG, said in a note.
As Canada's wildfire season begins, firefighters on Monday were racing to contain one blaze in British Columbia and two in Alberta near the heart of the country's oil sands industry. No operational disruptions had been reported.
But Alex Hodes, analyst at energy brokerage StoneX, said Canada's 3.3 million barrel per day production capacity is "very likely to be affected".
Oil prices settled up about 1% in the previous trading session on improving demand from the U.S. and China.
U.S. motorist group AAA has forecast Labour Day road trips for the May 25-27 long weekend rising to the highest level since 2000, while Chinese data over the weekend showed consumer prices rising for a third straight month.
The market also continued to react to bullish comments from Iraq's oil minister, Hayyan Abdul Ghani, over the weekend, according to a note from ANZ analysts. Ghani said on Sunday that Iraq would honour voluntary output cuts made by OPEC+, which includes the Organization of the Petroleum Exporting Countries, Russia and other non-OPEC producers, at its upcoming meeting on June 1.
That reversed course from his Saturday comments that Iraq had made enough voluntary reductions and would not agree to any new output cuts.