Iran, meanwhile, said negotiations with the US over a European Union proposal to revive a nuclear deal will drag on into September, undercutting speculation that increased oil flows are imminent. “The one trade that everyone can agree upon is that the oil market will likely remain tight,” said Ed Moya, senior market analyst at Oanda.

Crude is on course for a third straight monthly drop on concern global growth will slow as central banks tighten policy aggressively, hurting consumption. To counter that weakness, Saudi Arabia raised the possibility last week that the Organization of Petroleum Exporting Countries and its allies could cut output. The group will meet Sept. 5 to consider October production and review the outlook for the rest of the year. Separately, loadings from an export terminal for Kazakhstan crude have seen interruptions.

Cries of supply shortages continue to come from all corners, with Shell Plc’s Chief Executive Officer Ben Van Beurden telling a conference in Norway that it’s a “fantast” that the global energy crunch will be easy to rectify. Speaking at the same event, Tesla Inc. CEO Elon Musk said the world needs more oil and gas now while also pushing to transition to renewable supplies.

Meanwhile, the EU is planning a emergency intervention to dampen the spike in power prices. As natural gas prices rally and trade five times higher than crude futures, it will be giving strong incentives for energy switching, said Francisco Blanch, head of global commodities and derivatives research at Bank of America Corp. in a note to clients.

In a bullish note on commodities, Goldman Sachs Group Inc. said that crude oil had scope to push higher, especially amid shortages of other energy raw materials including natural gas.

West Texas Intermediate rose 3.7% to settle above $93 a barrel on Tuesday after getting an extra boost as the dollar weakened, making commodities priced in the currency more attractive. Brent settled above $100 for the first time since the beginning of August. Traders are weighing the potential of OPEC+ decreasing its crude output after Saudi Oil Minister Prince Abdulaziz bin Salman told Bloomberg futures prices are increasingly disconnected from fundamentals. Looking ahead, a US oil crude inventory report will be released Wednesday morning, offering markets a glimpse into the country’s current demand for oil.

“Oil continues to march higher today as the market digests comments regarding potential cuts from OPEC+,” said Stacey Morris, head of energy research at VettaFi. “Market observers will also be closely watching US inventory reports to see if the recent strength in gasoline demand has held up.” Adding further support to prices, Kazakh oil exports may be disrupted for months due to damaged moorings. Shippers are being asked to postpone some tanker loadings at the main export terminal for CPC Blend crude so that dive teams can assess the damage.

Oil has undergone a tumultuous period of trading since Russia’s invasion of Ukraine in late February upended flows. OPEC+ has reversed all of the output cuts made during the pandemic, but Prince Abdulaziz suggested the cartel may need to tighten production again when it meets next month.

Futures have lost about a quarter of their value since early June as escalating fears of an economic slowdown threaten the demand outlook. The potential revival of a nuclear deal with Iran, which could lead to a jump in crude exports from the OPEC producer, also added to the bearish sentiment. Yet market activity has dwindled, with open interest falling to the lowest since early 2015. Oil’s steady slide has also filtered through to the pump. In the US, gasoline prices are on their longest run of declines since 2015, potentially easing some of the inflationary pressures on the country’s economy. US diesel prices have fallen for more than 60 days, though that may reserve as demand for the fuel rises in the approach to winter. In Europe, figures released Tuesday showed economic activity shrinking for a second month.

Technical pressure is building in the products market gasoline futures approach their 200 day moving average. If prices for the September contract fall below the technical support level, it could trigger even more selling.

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West Texas Intermediate pared more than $4 of losses intraday to settle above $90 a barrel, still finishing cents below the previous session. The Saudi oil chief warned that “extreme” volatility and lack of liquidity in the futures market are moving prices in ways that don’t conform to fundamental supply-and-demand factors. The divergence may prompt the OPEC+ alliance to act, Bloomberg News reported. So far this month, prices have swung within a range of about $13.

Prince Abdulaziz represents the largest oil producer in OPEC+ and is arguably the most important player in the 23-nation alliance. He said futures prices don’t reflect the underlying fundamentals of supply and demand, which may require the group to tighten production when it meets next month to consider output targets. “The Saudis just reminded oil markets that they still run the show,” said Ed Moya, senior market analyst at Oanda. “OPEC+ is not happy with how oil market fundamentals are nowhere being reflected with current prices. It seems energy traders should prepare for enhanced volatility going forward and that the Saudis may look to do whatever it takes to keep prices supported here.”

Prices fell earlier in the session after US President Joe Biden spoke with leaders from France, Germany and the UK about reviving a nuclear deal with Iran, a step that probably would allow more crude shipments by the OPEC nation.

After surging in the first five months of the year, crude’s rally has been thrown into reverse, with losses deepening in the summer trading months. The selloff, which has been intensified by below-average trading volumes, may alleviate some of the inflationary pressures coursing through the global economy that have spurred central banks, including the US Federal Reserve, to hike rates.

Additionally, China was said to be planning a series of special loans to ramp up support for its beleaguered property market, the latest sign of the world’s largest crude importer moving to shore up its economy. The apparent need for such stimulus has exacerbated fears of a global slowdown.

Rising flows of long-haul cargoes into Asia from regions such as the US, which take twice as long as Middle Eastern barrels to reach buyers, have forced spot premiums of Persian Gulf barrels to dip in this month’s trading cycle. Meanwhile options markets have been pricing growing premiums for bearish put contracts that would profit a buyer if prices fall.