Oil futures snapped a four-day losing streak Tuesday, as a strike by Kuwaiti oil workers and production outages in other parts of the world renewed hopes for a smaller global glut of crude supplies.
Natural gas futures jumped nearly 8%, buoyed by weather-related demand for the fuel, according to Bloomberg MarketWatch.
May West Texas Intermediate crude rose $1.30, or 3.3%, to settle at $41.08 a barrel on the New York Mercantile Exchange, while June Brent crude on London’s ICE Futures Exchange rose $1.12, or 2.6%, to $44.03 a barrel.
Oil workers in Kuwait remained on strike a third day to protest proposals to cut wages and benefits for all public sector employees.
Prices fell Monday after a deal that would have limited future crude production between major OPEC members and non-OPEC countries was thwarted at the last minute on Sunday by Saudi Arabia’s refusal to join the pact without Iran’s commitment to do the same.
Market experts say OPEC’s biannual June 2 meeting is unlikely to yield a production cap agreement as member countries will act on their own self-interest and continue to pump at high rates to defend market shares.
ING’s head of commodity strategy Hamza Khan predicts a failure to reach a production cap agreement in the June meeting could push prices back to $30 a barrel.
Traders will be watching U.S. crude inventories and production data for cues on global supply. The American Petroleum Institute issues its weekly supply data late Tuesday, while the U.S. Energy Information Administration’s report comes out Wednesday morning.
Natural-gas futures settled at their highest level since early February. May natural gas rallied by 14.8 cents, or 7.6%, to settle at $2.088 per million British thermal units.
“With warmer weather affecting much of the U.S., the prospect of increased cooling demand has propelled much of the move higher for prices over the last two days,” said Robbie Fraser, commodity analyst at Schneider Electric.