DTN Oil

WASHINGTON, D.C. (DTN) -- New York Mercantile Exchange oil futures and Brent crude traded on the Intercontinental Exchange settled Tuesday's session with solid gains propelled by reports suggesting Organization of the Petroleum Exporting Countries and allied producers are planning to reduce their collective crude production by 1 million bpd in November to support oil prices, while an advance by the U.S. dollar index triggered in part by better-than-expected economic data offset some of the gains for the oil complex.

U.S. consumer confidence index, reported by the Conference Board, improved more than expected in September, supported by gains in the labor market and declining gasoline prices. American Automobile Association reported the national gasoline price averaged $3.72 gallon on Monday, 14 cents less than a month ago while down substantially from mid-June when the U.S. average reached a record high $5.016 gallon.

"Purchasing intentions were mixed, with intentions to buy automobiles and big-ticket appliances were up in September, while home purchasing intentions fell. Looking ahead, the improvement in confidence may bode well for consumer spending in the final months of 2022, but inflation and interest-rate hikes remain strong headwinds to growth in the short term," said Lynn Franco, senior director of Economic Indicators at The Conference Board.

Other economic data released Tuesday was also supportive for broader sentiment, including a smaller-than-expected decrease in U.S.-manufactured non-durable goods orders in August. Still, excluding the volatile category of transportation, new orders increased 0.2% from the previous month, while excluding defense, new orders decreased 0.9%.

Underpinning gains in the oil complex are reports Russia is ready to back a 1 million bpd cut in OPEC+ production when officials meet on Oct. 5. Saudi Arabia has indicated on multiple occasions that the kingdom stands ready to cut output to defend prices despite pleas from Western governments to release more supply into the market. Last month, OPEC+ agreed to cut oil production by 100,000 bpd in October, reversing a 100,000-bpd increase agreed upon for September. The modest increase was seen as a symbolic gesture for Western oil buyers.

West Texas Intermediate November futures traded on the NYMEX advanced $1.79 bbl to settle at $78.50 bbl, reversing higher from Monday's $76.42 nine-month low on the spot continuous chart. Brent, the international crude benchmark listed on ICE, gained $2.21 bbl to settle at $86.27 bbl. NYMEX RBOB October futures added 10.89 cents to $2.4931 gallon, and the front-month ULSD contract rallied 13.08 cents for a $3.2599 gallon settlement.

In foreign exchange markets, the U.S. dollar index reversed early weakness to settle the session at 114.047 against a basket of foreign currencies.

Liubov Georges can be reached at liubov.georges@dtn.com