US Crude Returns Above $100/Barrel – Natural Gas Rally 14%

Oil reacted after the two-day sell-off that brought it into bear market territory, after its prices recovered some of their losses with American crude climbing back above 100 dollars a barrel.

Growing worries about an impending recession sent oil prices tumbling in the past two sessions, with the commodity giving back much of its gains through 2022 as the energy crisis from Russia’s invasion of Ukraine looms.

Traders remain cautious on rising demand but worries about Federal Reserve policy, but a weaker dollar (-0.1%) and a boost in gasoline on Thursday also boosted oil prices, although the market remains broadly tight.

Data from the Energy Information Administration showed a healthy rebound in gasoline demand, easing some recent concerns, which pushed the fuel higher with the contract for August delivery up 18 cents, or 5.7%, at $3.4204 a gallon.

Meanwhile, an unexpected weekly rise in US crude inventories failed to stem Thursday’s rally in prices. Specifically, domestic crude inventories rose by 8.2 million barrels for the week ended July 1. Analysts had expected a decline of 1.2 million barrels, according to a poll by S&P Global Commodity Insights.

The increase in crude inventories was offset by increases in gasoline and distillate inventories, said Matt Smith, an analyst at Kpler. “Not surprisingly, demand for gasoline was strong last week ahead of the July 4th weekend.”

In this climate, the slow press West Texas Intermediate U.S. crude for August delivery rose $4.20, or 4.3%, to settle at $102.73 a barrel.

Press oil moved at corresponding rates Brent for September delivery, which gained $3.96, or 3.9%, to $104.65 a barrel.

In the meantime, rally marked the natural gasafter the EIA reported a smaller-than-expected increase in US supplies on the week. Natural gas for August delivery added 79 cents, or 14.3%, to settle at $6.297 per 1 million British thermal units.