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Oil futures gained ground Wednesday, buoyed by U.S. government data showing weekly declines in domestic crude and product supplies.
Natural-gas futures edged lower after a three-session climb on the back of recent news that Russia has moved to curb supplies of the fuel to Europe.
Traders were also awaiting the outcome of a Federal Reserve meeting that’s expected to see another large interest-rate hike.
Price action
-
West Texas Intermediate crude for September delivery
CL.1,
+2.47% CLU22,
+2.47%
rose $1.04, or 1.1%, to $96.02 a barrel on the New York Mercantile Exchange. -
September Brent crude
BRNU22,
+2.16% ,
the global benchmark, rose $1.21, or 1.2%, to $105.61 a barrel on ICE Futures Europe. The most actively traded October contract
BRN00,
+2.34% BRNV22,
+2.34%
was up $1.28, or 1.3%, at $100.74 a barrel. -
Back on Nymex, August gasoline
RBQ22,
+1.41%
rose 0.8% to $3.3804 a gallon, while August heating oil
HOQ22,
+3.00%
gained 2% to $3.6561 a gallon. -
August natural gas
NGQ22,
-3.75%
fell 2.8%, to $8.577 per million British thermal units ahead of the contract’s expiration at the end of the trading session.
Supply data
Oil prices added to earlier gains on Wednesday after the Energy Information Administration reported weekly declines in U.S. crude, gasoline and distillate supplies.
“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.”
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.
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.
Market drivers
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.
The Fed is expected to announce another 75 basis point rise in its benchmark interest rate later Wednesday.
Read: Four things you will want to listen for at Wednesday’s Federal Reserve meeting
Meanwhile, natural-gas futures moved lower in the wake of a three-session rise.
Tariq Zahir, managing member at Tyche Capital Advisors, told MarketWatch that 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.
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