Crude-oil futures climbed on Tuesday to settle at their highest price in more than week, while U.S. natural-gas prices eased back from a 14-year high.
West Texas Intermediate crude for October delivery
advanced $3.38, or 3.7%, to settle at $93.74 per barrel on the New York Mercantile Exchange.
October Brent crude
gained $3.74, or 3.9%, to settle at $100.22 per barrel on ICE Futures Europe. That’s highest front-month Brent settlement since Aug. 2, according to Dow Jones Market Data.
Back on Nymex, September gasoline prices
added 4 cents, or nearly 1.5%, to $2.933 per gallon while September heating oil
rose 7 cents, or 1.7%, to $3.8419 per gallon.
September natural-gas prices
declined by 49 cents, or 5%, to settle at $9.193 per million British thermal units. Prices had touched an intraday high of $10.028 — the highest level since July 2008.
Oil prices climbed on Tuesday after Saudi Arabian Energy Minister Prince Abdulaziz bin Salman on Monday raised the prospect of OPEC+ reducing its oil production in comments to Bloomberg News.
“Many traders thought that rally in oil prices had come to an end as investors were worried once again about weak demand and excessive supply,” said Naeem Aslam, chief market analyst at AvaTrade, in a market update.
Read: U.S. economy slows again, S&P finds, due to high inflation and rising interest rates
But the members of the Organization of the Petroleum Exporting Countries “have many tactics to balance the oil prices without doing anything,” Aslam said. Saudi Arabia reportedly warned that it could reduce output amid the drop in prices.
Meanwhile, Iran dropped another demand related to nuclear inspections as negotiations continue over reviving the Iran nuclear deal, CNN reported. It’s a development that could make a breakthrough more likely after Tehran dropped another key request last week and potentially lead to a return of Iran oil to the market.
Back in the U.S., the Energy Information Administration will release its weekly report on petroleum supplies Wednesday morning.
On average, analysts expect the EIA to report a decline of 3.2 million barrels for the week ended Aug. 19 according to a poll conducted by S&P Global Commodity Insights. They also forecast inventory declines of 2.5 million barrels for gasoline and 360,000 barrels for distillates.
Natural-gas prices retreat
Meanwhile, natural-gas prices pulled back from 14-year highs after Freeport LNG said Tuesday that it plans to restart its liquefaction facility in early to mid-November, later than previously expected. That would lead to a further delay of U.S. liquified natural gas exports.
Still, soaring natural-gas prices in Europe have helped to keep prices elevated around the world, said commodities analysts at Commerzbank. Prices in Europe surged on Monday following Russia’s announcement that its natural-gas giant Gazprom would once again halt supplies to Europe via its Nord Stream 1 pipeline for three days starting Aug. 31.
“Traders know that this is not going to stop here as this is only a beginning,” said AvaTrade’s Aslam. “Russia is going to play this game with Europe a lot more now, especially the fact that summer has come to an end and winter is just around the corner.”
However, Germany’s natural gas storage facilities are now more than 80% full ahead of the winter, showing steady progress despite a drastic reduction in deliveries from Russia amid the war in Ukraine.
See: Pain in Europe worsens with natural-gas prices up nearly 20% as Russia readies to shut down vital pipeline again
Also see: Why natural-gas prices have climbed to a 14-year high
Hear from top Wall Street energy analysts at the Best New Ideas in Money Festivalon Sept. 21 and Sept. 22 in New York. RBC’s Helima Croft will be there.