By Myra P. Saefong and Joseph Adinolfi
Oil prices finished higher on Thursday, one day after posting their first gain in four sessions as traders digested a sharp drop in U.S. inventories, which helped to offset concerns about the impact of slowing global economic growth.
Meanwhile, natural-gas futures teased fresh 14-year highs on tight supplies in the U.S. and Europe before settling with a modest loss for the session.
West Texas Intermediate crude for September delivery (NYM:CL.1) (NYM:CL00) gained $2.39, or 2.7%, to settle at $90.50 a barrel on the New York Mercantile Exchange. Prices for the front-month contract settled at their highest since Aug. 12, FactSet data show.
October Brent crude , the global benchmark, climbed $2.94, or 3.1%, at $96.59 a barrel on ICE Futures Europe.
Back on Nymex, September gasoline rose 3.1% to $3.0261 a gallon, while September heating oil settled at $3.6497 a gallon, up 0.9%.
September natural gas fell 0.6% to $9.188 per million British thermal units after trading as high as $9.663 during the session. Prices settled Tuesday at $9.329, their highest finish since August 2008.
Oil prices had climbed on Wednesday, after falling to their lowest level since January earlier in the week, as the Energy Information Administration on Wednesday reported that U.S. crude inventories fell by 7.1 million barrels for the week ended Aug. 12.
The good news is that, according to the EIA, petroleum demand in the United States is a lot stronger than the government data suggested just a couple of weeks ago, said Phil Flynn, senior market analyst at The Price Futures Group, in a daily report. “The bad news is that if demand is that strong it’s clear that the United States is going to face significant challenges because supplies are so far below normal.”
The Energy Information Administration reported Wednesday that U.S. crude inventories fell by 7.1 million barrels and gasoline stockpiles declined by 4.6 million barrels for the week ended Aug. 12.
Still, “oil prices have been crushed in August on recession fears, talk of a potential nuclear deal with Iran , and signs that the Chinese economy is faltering and that their oil demand is lagging,” said Flynn.
Iran International tweeted Thursday tweeted a list of “concessions” the U.S. has agreed to give Iran amid talks to reach an Iran nuclear deal.
Natural-gas prices, meanwhile, have rallied this week on the back of tight supplies in the U.S., as well as Europe, after Russia reduced the flow of supplies. Prices settled at a 14-year high on Tuesday, then settled lower on Wednesday and Thursday, but remain roughly 4.9% higher for the week.
The EIA on Thursday, reported that domestic natural-gas supplies rose by 18 billion cubic feet for the week ended Aug. 12.
That compared to an average forecast for an increase of 34 billion cubic feet from analysts polled by S&P Global Commodity Insights. Total working gas stocks in storage stand at 2.519 trillion cubic feet, down 296 billion cubic feet from a year ago, the EIA data showed.