U.S. crude oil, natgas post back-to-back gains on supply data, rate cut hopes

U.S. crude oil futures rose to their highest in a week on Thursday, extending gains in the previous session sparked by data showing slower U.S. inflation and weekly storage data that pointed to a drop in domestic oil inventories.

The milder than expected rise in U.S. consumer price index for April “knocked the dollar down to the 200-day moving average, bolstering commodity markets across the board,” StoneX’s energy team led by Alex Hodes says, according to Marketwatch.

Financial markets have “placed the most bets on a September interest rate cut by the Federal Reserve, which would continue to temper the dollar strength and shift that strength over to commodities and equities,” StoneX says.

Meanwhile, U.S. natural gas prices also climbed for a second straight day as domestic storage rose by slightly less than expected, with a build of 70B cf for the week ended March 10.

The natgas rally also is fueled by “stout flows of 1.9B cf the past week at Freeport LNG, much lighter Y/Y production, bouts of early season heat over Texas,” and expectations of a steady decrease in still high inventory surpluses, NatGasWeather.com says, according to Dow Jones.

Front-month Nymex crude (CL1:COM) for June delivery closed +0.7% to $79.23/bbl, its best settlement in a week, and front-month July Brent crude (CO1:COM) finished +0.6% to $83.27/bbl.

Also, front-month Nymex June natural gas (NG1:COM) closed +3.3% to $2.495/MMBtu, its highest settlement value since January 26.

ETFs: (NYSEARCA:USO), (BNO), (UCO), (SCO), (USL), (DBO), (DRIP), (GUSH), (NRGU), (USOI), (UNG), (BOIL), (KOLD), (UNL), (FCG)

More than 2M bbl/day of oil sands production is at risk from wildfires in Alberta, with some areas issuing evacuation orders for communities, Rystad Energy says, as reported by Dow Jones.

While oil sands operators have not yet indicated any impact to upstream production or upgrading activities, an out-of-control fire along the Athabasca River intersects with critical midstream infrastructure servicing the Horizon and Syncrude mining and upgrading projects, according to Rystad.

However, the consultancy also notes a sizable amount of planned maintenance is scheduled in May, which is typical as the industry ramps production into the higher demand summer driving season in North America.