SAN FRANCISCO (MarketWatch) -- Crude-oil futures closed higher for a second day Thursday but remained below the $100-per-barrel level, overshadowed by a bigger-than-expected buildup in U.S. natural-gas supplies that pulled prices for the latter away from what had been a three-week high.
News that the world's biggest central banks injected additional liquidity into the financial system provided support for oil prices, though uncertainty over the impact on energy demand remained.
Crude for October delivery climbed 72 cents to close at $97.88 a barrel on the New York Mercantile Exchange.
It climbed as high as $102.24 earlier in electronic trading on Globex. It was at $98.02 as of 5:15 p.m. EDT on Globex.
Meanwhile, the October contract for natural gas had climbed to a three-week high of $8.32 per million British thermal units on Globex.
But prices fell after the Energy Department reported a 67 billion-cubic-foot increase in natural-gas supplies for the week ended Sept. 12. Analysts at Global Insight had expected a buildup of 50 billion cubic feet for gas in storage.
October natural gas dropped 28.9 cents, or 3.7%, to finish at $7.621. Earlier, it climbed as high as $8.32 on Globex, its strongest intraday level since Aug. 28.
The rise in last week's natural-gas supplies "was well above expectations, which is somewhat surprising given the fact that quite a bit of Gulf production was still offline in the aftermath of [Hurricane] Gustav," said Beth Sewell, managing partner at Quantum Gas & Power Services.
The supply report issued next week will show results from Hurricane Ike, she noted.
Total stocks of natural gas now stand at 2.972 trillion cubic feet, the Energy Department estimated. This was down 142 billion cubic feet from the year-ago level but 61 billion cubic feet above the five-year average for gas in storage, the data showed.
Money vs. supply and demand
Meanwhile, there were quite a few factors to support the price of oil.
"We're seeing two dynamics playing in the oil market currently: the financial turmoil and supply/demand issues," said Thomas Hartmann, analyst at Altavest Worldwide Trading. "Both are reasonably bullish."
"The financial turmoil is causing much angst in traders and could lead to a loss of confidence in the dollar, potentially causing the inflation factor to creep back into play," he said in emailed comments.
At the same time, "supplies of gasoline have been falling materially in the past weeks, not due to high demand but to lack of production with refinery rates hovering just about 78% of capacity," he said.
On Nymex, October reformulated gasoline climbed by 1.9 cents to close at $2.4824 a gallon while October heating oil lost 4.2 cents to close at $2.7824 a gallon.
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