Oil futures settled Wednesday at their highest price in a week, buoyed by U.S. government data showing weekly declines in domestic crude and product supplies.
Natural-gas futures finished lower after a three-session climb on the back of recent news that Russia has moved to curb supplies of the fuel to Europe.
Oil prices held onto most of their gains after Federal Reserve announced Wednesday afternoon that it was raising its benchmark short-term rate by another 0.75 percentage point, as had been expected.
West Texas Intermediate crude for September delivery
rose $2.28, or 2.4%, to settle at $97.26 a barrel on the New York Mercantile Exchange, the highest front-month finish since July 20, according to Dow Jones Market Data.
September Brent crude
the global benchmark, rose $2.22, or 2.1%, to $106.62 a barrel on ICE Futures Europe, also the highest in a week. The most actively traded October contract
added $2.21, or 2.2%, at $101.67.
Back on Nymex, August gasoline
rose 2.2% to $3.4288 a gallon, while August heating oil
gained 3.7% to $3.7173 a gallon.
August natural gas
fell 3.4%, to end at $8.687 per million British thermal units on the contract’s expiration day. September natural gas
which is now the front month, settled at $8.554, down 3.1%.
Oil prices added to early gains on Wednesday after the Energy Information Administration reported weekly declines in U.S. crude, gasoline and distillate supplies.
There’s no way to look at energy prices today and “not have a bullish outlook,” Tariq Zahir, managing member at Tyche Capital Advisors, told MarketWatch. The EIA reported much larger inventory draws across the board, he said.
“We do feel we could see crude regain the $100 level [in WTI] in the days and weeks to come,” said Zahir.
U.S. crude inventories fell by 4.5 million barrels for the week ended July 22, the EIA reported Wednesday. On average, analysts expected a decline of 800,000 barrels, according to a poll conducted by S&P Global Commodity Insights. The American Petroleum Institute late Tuesday said U.S. crude supplies fell 4 million barrels last week, according to the Dow Jones Newswires.
“Despite the drop in refining activity, lower imports and strong exports have resulted in a solid draw to crude inventories — even with a 5.6 million-barrel [Strategic Petroleum Reserve] release into commercial stocks,” said Matt Smith, lead oil analyst, Americas, at Kpler. “Draws to both gasoline and distillates have rounded out a price-supportive report, as implied demand rose for both in the last week.”
The EIA report also showed weekly supply declines of 3.3 million barrels for gasoline and 800,000 barrels for distillates. The analyst survey called for inventory decreases of 1.1 million barrels for gasoline and 200,000 barrels for distillates.
Crude stocks at the Cushing, Okla., Nymex delivery hub edged up by 700,000 barrels, while crude-oil stocks in the Strategic Petroleum Reserve fell by 5.6 million barrels last week, the EIA said.
See: Biden administration says releases from oil reserves cut gasoline prices by up to 40 cents per gallon
Concerns that aggressive monetary tightening by the Fed and other central banks could tip the economy into recession or spark a sharp slowdown have weighed on crude-oil prices in recent weeks, analysts said.
Oil prices, however, held onto the bulk of their gains following the Fed decision to lift its benchmark interest rate. The move had been expected.
Meanwhile, natural-gas futures ended lower in the wake of a three-session rise.
Tyche Capital’s Zahir said the commodity should be “bought on any weakness.” Tailwinds for natural gas include the heat here in the U.S. and the Atlantic hurricane season, as Russian President Vladimir Putin looks to restrict winter supply in Europe, he said.
Read: ‘Winter is coming’: European countries agree to ration gas amid Russian supply fears
Natural-gas futures ended at a seven-week high on Tuesday after Russian energy giant Gazprom said it would cut natural-gas flows to Germany through the Nord Stream 1 pipeline to 20% of capacity.