Oil futures rose Tuesday, finding support as supply disruptions in Libya contributed to expectations for tighter global crude supplies.
Natural-gas futures, meanwhile, were on track to settle at a five-week low after Freeport LNG, an export facility for liquified natural gas, said it doesn’t expect a return to full plant operations until late this year.
West Texas Intermediate crude for July delivery
rose $2.57 cents, or 2.1%, to $123.50 a barrel on the New York Mercantile Exchange.
August Brent crude
the global benchmark, was up $2.74, or 2.2%, at $125.01 a barrel on ICE Futures Europe.
Back on Nymex, July gasoline
rose 2.2% to $4.123 a gallon, while July heating oil
gained 3.9% to $4.4519 a gallon.
July natural gas
was down 16.5% at $7.19 per million British thermal units, eying the lowest front-month contract finish since May 9, FactSet data show.
Oil prices on Monday gave up early losses to finish higher, with that recovery coming amid a report that Libya’s crude-oil production may have fallen more than one million barrels per day due to political turmoil, analysts at Zaner wrote in a Tuesday newsletter.
Libyan Oil Minister Mohamed Oun told Bloomberg on Monday that the country’s daily output was down about 1.1 million barrels, implying that Libya is pumping only around 100,000 barrels a day.
Still, Chinese COVID concerns are “casting a shadow over energy markets, and this may keep further gains in check until there are clear signs of progress in dealing with Beijing’s current outbreak,” the analysts at Zaner said.
Beijing implemented a mass testing program Monday after a COVID outbreak tied to a nightclub and put other restrictions in place.
On Tuesday, the Organization of the Petroleum Exporting Countries left its forecast for 2022 growth in oil demand broadly unchanged at 3.4 million barrels a day. On the supply side, the organization revised down its forecast for non-OPEC liquids growth in 2022 to 2.1 million barrels a day, down by 250,000 barrels a day from its May estimate. That’s equal to the downward revision for Russia’s 2022 production, while the forecast for U.S. liquids supply growth was marginally unchanged at 1.3 million barrels a day.
The White House on Tuesday said President Biden will visit Saudi Arabia in July as part of a trip to the Middle East. The visit, which had long been speculated, is seen as an effort to mend relations with the kingdom.
Natural-gas prices were also a standout on Nymex Tuesday, with prices down by more than 16%.
The delay in full resumption of activity at the Freeport LNG export facility after a fire means that an additional two billion cubic feet of natural gas per day will “remain in the U.S. market through the end of the summer, which should allow for larger storage injections and help inventories see a greater recovery before the start of winter,” said Christin Kelley, senior commodity analyst at Schneider Electric, in a note.