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Oil edges higher after back-to-back declines

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Oil futures rose Tuesday after posting back-to-session declines, with prices finding support from expectations that U.S. and global crude supplies will tighten.

Traders also awaited official U.S. data on weekly petroleum supplies set for release on Wednesday.

Price action

  • West Texas Intermediate crude for August delivery
    CL.1,
    +1.75%

    CL00,
    +1.70%

    CLQ23,
    +1.75%

    rose $1.05, or 1.4%, to $75.20 a barrel on the New York Mercantile Exchange.

  • September Brent crude
    BRN00,
    +1.39%

    BRNU23,
    +1.39%
    ,
    the global benchmark, was up 67 cents, or 0.9%, at $79.17 a barrel on ICE Futures Europe.

  • Back on Nymex, August gasoline
    RBQ23,
    +2.04%

    rose 2.2% to $2.6906 a gallon, while August heating oil
    HOQ23,
    +1.25%

    gained 1.5% to $2.6024 a gallon.

  • August natural gas
    NGQ23,
    +3.54%

    rose 4.9% to $2.634 per million British thermal units following four consecutive session declines.

Market drivers

Crude-oil prices moved up after a Monday pullback that was blamed on weak data on Chinese economic growth and the restart of production at Libyan oil fields that had been shut down due to protests.

Crude prices remain down sharply in the year to date but have bounced in July, buoyed in part by expectations for a tightening market in the second half amplified by additional supply cuts by Saudi Arabia and Russia.

Read: Why Russia’s decision to halt grain deal is stirring global inflation worries

Also see: El Niño has potential to disrupt the outlook for sugar, rice and other consumer staples

“Supply concerns could continue to support an uptrend in the market over the medium term as traders could remain cautious in the face of potential new intervention from OPEC+ to balance prices,” Denys Peleshok, head of Asia at CPT Markets, said in a note.

“However, demand concerns could remain the center of attention for traders and could create some uncertainty and fuel some volatility and price corrections. In this regard, the market reacted to Chinese economic data which continued to show a weaker-than-expected recovery,” Peleshok wrote.

Don’t miss: Here was the buzz on oil at the Calgary Stampede

China reported that its economy grew 6.3% year over year in the second quarter, missing expectations for 6.9% growth expected by economists polled by The Wall Street Journal.

The disappointing Chinese economic data offset an increase in Russia/Ukraine tensions to push commodity prices lower on Monday, analysts at Sevens Report Research wrote in Tuesday’s newsletter. “A Chinese economic slowdown, if it happens, will add to demand concerns” they said.

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