By 
Oil futures ended higher Monday, extending a bounce after major benchmarks last week traded at their lowest levels since February on worries about the demand outlook.
Price action
West Texas Intermediate crude for September delivery
CL00,
+1.76%
CL.1,
+1.76%
CLU22,
+1.76%
rose $1.75, or 2%, to close at $90.76 a barrel on the New York Mercantile Exchange, after falling 9.7% last week.
October Brent crude
BRN00,
-0.24%
BRNV22,
-0.24%,
the global benchmark, gained $1.73, or 1.8%, to settle at $96.65 a barrel on ICE Futures Europe, after an 8.7% decline last week.
Back on Nymex, September gasoline
RBU22,
+1.12%
gained 1.1% to end at $2.8862 a gallon, while September heating oil
NGU22,
-5.51%
shed 1.1% to close at $3.1791 a gallon.
September natural gas
NGU22,
-5.51%
dropped 5.9% to end at $7.589 per million British thermal units.
Market drivers
Oil futures tanked last week as fears over the potential for a global economic slowdown undercut demand expectations, analysts said. A much stronger-than-expected July U.S. jobs report on Friday and China on Sunday said exports grew 18% to $333 billion in July compared with the same month last year, and rose 17.9% from June.
Imports grew just 2.3% compared with a year ago, while the trade surplus hit an all-time high of $101.3 billion.
Market bulls argued that the jobs data warranted a shift in market focus back toward supply.
“The running and hiding of the bulls might be the perfect opportunity to start getting long because the outlook for oil continues to be one of under supply,” said Phil Flynn, analyst at The Price Futures Group, in a note.
“Oh sure, we can be fearful of this recession. Yet the problem is that last week’s blockbuster jobs number flew in the face of those that are predicting a deep recession,” he wrote.
Meanwhile, a premium for nearby oil futures over contracts for later delivery — a phenomenon known as backwardation — has faded, signaling that an earlier scramble for physical supply has eased.
Energy Information Administration data last week showed crude-oil stocks at Cushing, Oklahoma, the delivery hub for Nymex futures, rose to a two-month high near 24.5 million barrels, noted analysts at the Schork Report.
“A market that was concerned about the Nymex complex scraping tank bottoms just a few weeks ago is now comfortable,” they said, in a newsletter early Monday. “Over the past three weeks, the backwardation of the Sep/Oct WTI collapsed from $3 to $0.93, while the Oct/Nov WTI backwardation dropped from $2.43 to $0.82.”
Meanwhile, natural gas dropped on milder short-term weather forecasts, said Christin Kelley, senior commodity analyst at Schneider Electric, in a note.
“NOAA’s 6 to 10-day forecast shows cooler-than-normal temperatures for most of the eastern U.S., which should help reduce cooling demand in mid-August,” Kelly wrote, while pipeline exports to Mexico remain subdued following a compressor station outage last week. Pipeline exports are estimated at 5.4 billion cubic feet, 18% lower week-on-week and nearly 13% lower year-on-year, Kelly said.
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