Oil futures declined on Tuesday, after weak economic data out of China weighed on the global economic outlook and developments tied to a draft Iran nuclear deal pulled U.S. prices to their lowest settlement since late January.

Natural-gas futures, meanwhile, ended the session at their highest since 2008, buoyed by tight supplies in the U.S. and Europe.

Crude prices saw volatile trading Tuesday, seesawing between losses and gains before ending solidly lower, a day after posting losses of roughly 3%.

Investors tracked developments around efforts to revive Iran’s nuclear accord. Tehran responded to a draft agreement presented by the European Union, indicating it had reservations and signaling talks were likely to extend beyond what had been described as a Monday deadline, Politico reported.

The possibility of a nuclear deal for Iran means more supplies could hit the market, Fawad Razaqzada, market analyst at City Index and FOREX.com, told MarketWatch.

See: Iran nuclear deal: What’s at stake for oil prices as Tehran prepares response to EU proposal

“However, even if a new agreement were to be signed, it would presumably take some time before sanctions could be fully lifted,” said Carsten Fritsch, commodity analyst at Commerzbank, in a note. “When the 2015 agreement was reached, it took roughly half a year for this to happen. Iran’s oil production then increased by around 700,000 barrels per day in the first half of 2016.”

Meanwhile, the Chinese yuan CNYUSD, is weakening sharply because of disappointing Chinese data and the People’s Bank of China’s swift intervention, said Razaqzada.

This also has been making commodities sold in the U.S. dollar more expensive for Chinese buyers, he said. “If we see more renminbi weakness, which is now likely, this could negatively impact crude oil and metal prices.”

Early this week, China’s industrial production and retail sales came in lower than the previous month and shy of analysts’ forecasts, and the PBOC delivered a surprise interest rate cut.

Still, U.S. data released Tuesday was somewhat upbeat, showing that industrial production rose 0.6% in July, more than the expected 0.3% increase, according to a survey by The Wall Street Journal.

The U.S. Energy Information Administration will release its weekly petroleum supply data early Wednesday.

On average, analysts expect the report to show declines of 1.7 million barrels each in commercial crude and gasoline inventories for the week ended Aug. 12, along with a climb of about 400,000 barrels for distillate stockpiles, according to a survey conducted by S&P Global Commodity Insights.

Natural-gas futures were a standout, jumping by nearly 7% Tuesday.

“European gas prices remained high over the weekend amid maintenance activity in Norway, while flows through the Nord Stream 1 pipeline remain significantly constrained,” said Lu Ming Pang, analyst at Rystad Energy, in a Tuesday note. “Prices in the U.S. also remain elevated amid high temperatures and, although the heat is due to abate, hurricane season is still lurking.”

On average, analysts expect the EIA on Thursday to report a 34 billion-cubic-foot climb in U.S. gas in storage for the week ended Aug. 12, according to survey by S&P Global Commodity Insights, which noted that a rise of that size would be well below the five-year average climb of 47 billion cubic feet.

Hear from top Wall Street energy analysts at the Best New Ideas in Money Festival on Sept. 21 and Sept. 22 in New York. RBC’s Helima Croft will be there.

Options dealers will have less upside risk to hedge heading into next week.

Myra P. Saefong, assistant global markets editor, has covered the commodities sector for MarketWatch for 20 years. She has spent the bulk of her years at the company writing the daily Futures Movers and Metals Stocks columns and has been writing the weekly Commodities Corner column since 2005.

William Watts is MarketWatch’s senior markets writer. Based in New York, Watts writes about stocks, bonds, currencies and commodities, including oil. He also writes about global macro issues and trading strategies. Before moving to New York, he reported for MarketWatch from Frankfurt, London and Washington, D.C.

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