Oil prices rise on Saudi energy minister’s OPEC+ comments, agriculture commodities surge

Energy prices are moving higher after the Saudi energy minister hinted at cutting OPEC+ supply, while agricultural commodities are also up thanks to the surge in cotton around the world.

Video transcript

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SEANA SMITH: Energy by far the leader in today's market, moving to the upside after hints that Saudi Arabia could cut supply. Let's bring in Yahoo Finance's Ines Ferré for a closer look. And Ines, taking a look at crude here closing up just over 3 and 1/2%. We did get that intraday jump in nat gas earlier.

INES FERRÉ: Yeah, that's right, Seana. And if we just take a look at our YFi Interactive board, you'll notice a price action that we're seeing. Brent Crude above $100 a barrel. WTI up above $93 a barrel.

And we did have those comments from the Saudi Arabian energy minister, saying that they may lean on cuts to sort of combat the challenges of volatility in the market. Of course, that was also part of-- partly political because of if an Iranian deal were to go through, that would dump more oil barrels onto the market.

But what's interesting is also what's been happening with natural gas because natural gas, if you'll take a look, had jumped to a 14-year high. I've got to pull up the max chart here to show you, since 2008, that we haven't seen these levels for natural gas. And a lot of this has had to do with concerns about reserves.

Now, the reason why you saw today the action of pulling back from those 14-year highs because the operator of a key export terminal that had been damaged earlier this year, announced a delay for a restart for that. So that means that there be more reserves that stay here in the US.

But look, the bottom line when it comes to energy prices, Europe is paying high sky energy prices, record energy prices. And when it comes to oil, I have spoken to analysts that they expect these oil prices to-- for WTI, to remain between $80 and $100 a barrel in that range. And part of that has to do with the limited capacity, the other part has to do with what's going on with Russia.

RACHELLE AKUFFO: And Ines, what about agricultural commodities like cotton and grains. How are they faring today?

INES FERRÉ: Yeah, that's right. We have seen cotton futures that are up more than 4% today. And part of this has to do with a surge in cotton that we've seen around the world because of weather conditions with drought, with dry weather that's been impacting cotton production. Factories have had to mix cotton with other types of materials, like rayon and polyester, in some parts of the world.

And in Texas, which is the largest producer for cotton, only 11% of their production last week was-- or their crops was rated good to excellent. As far as corn is concerned, we also have seen corn futures go higher.

And part of this has to do with the dry weather in Nebraska and places like South Dakota where some plants have not even given cotton ears-- or making ears of corn, excuse me. So we are seeing that the weather conditions are definitely have been affecting the grains as well.

DAVE BRIGGS: Ines Ferré, thanks so much.