Crude oil prices rose higher on Tuesday following a report that Saudi Arabia is considering cutting crude exports as U.S. production surges ahead, according to Bloomberg MarketWatch.
August West Texas Intermediate crude rose 38 cents, or 0.8%, to settle at $46.40 a barrel on the New York Mercantile Exchange.
On the London ICE Futures Exchange, September Brent crude, the global benchmark, gained 42 cents, or 0.9%, to $48.84 a barrel.
Oil producers that participate in the OPEC production cut agreement have been concerned that rising output from fellow OPEC members Libya and Nigeria as well as the United States will outweigh their efforts to rebalance the oil market.
OPEC will hold its next meeting with other major oil producers in Russia on July 24.
“There is little sign as yet that U.S. oil production is stagnating despite average U.S. oil prices holding below $50 per barrel for most of the past three months,” said Rob Haworth, senior investment strategist at U.S. Bancorp Wealth Management. “In our view this reflects solid economics for U.S. drillers and the availability of affordable oil production even at these low price levels.”
Investors will be watching for the Energy Information Administration’s weekly production and stocks report due Wednesday. S&P Global Platts estimates a domestic drawdown of commercial stocks to drop by 3 million barrels. The American Petroleum Institute will release its own report on U.S. supplies late Tuesday.
Back on the New York Mercantile Exchange, natural gas prices climbed, with warmer weather forecasts expected to lift demand. August natural gas finished at $3.088 per million British thermal units, up 6.9 cents, or 2.3%.