August WTI crude oil (CLQ25) at the moment is up +1.41 (+2.17%), and August RBOB gasoline (RBQ25) is up +0.0380 (+1.84%).

Crude oil and gasoline costs are sharply larger at the moment because of the decline within the greenback index (DXY00) to a 3-1/4 12 months low.  Additionally, at the moment’s rally within the S&P 500 to a 4-month excessive reveals confidence within the financial outlook, which is supportive for vitality demand and crude costs.  Crude oil additionally has carryover help from Wednesday’s EIA report, which confirmed a larger-than-expected attract crude oil inventories and a surge in US gasoline demand to a 3-1/2 12 months excessive.

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Crude oil costs have underlying help after US and European intelligence reviews recommend that Iran nonetheless has all or a few of its stockpile of 60% enriched uranium even after the US bombing, which implies that there shall be continued stress on Iran for a nuclear-inspection settlement and continued sanctions till that settlement occurs.  Nevertheless, the US and Iran have talks scheduled for subsequent week, and the US could however gloss over the enriched uranium downside and provide to cut back or eradicate sanctions.

Concern a few world oil glut is damaging for crude costs.  On Wednesday, Russia said that it’s open to a different output hike for OPEC+ crude manufacturing in August, when the group meets on July 6.  On Could 31, OPEC+ agreed to a 411,000 bpd crude manufacturing hike for July after elevating output by the identical quantity for June.  Saudi Arabia has signaled that further similar-sized will increase in crude output may comply with, which is seen as a method to cut back oil costs and punish overproducing OPEC+ members, reminiscent of Kazakhstan and Iraq.  OPEC+ is boosting output to reverse the 2-year-long manufacturing minimize, regularly restoring a complete of two.2 million bpd of manufacturing.  OPEC+ had beforehand deliberate to revive manufacturing between January and late 2025, however now that manufacturing minimize will not be absolutely restored till September 2026.  OPEC Could crude manufacturing rose +200,000 bpd to 27.54 million bpd.

Gasoline costs have help from the American Vehicle Affiliation (AAA) projection {that a} report 61.6 million folks will journey by automobile this Fourth of July vacation (June 28 to July 6), up +2.2% from final 12 months and an indication of stronger gasoline demand.

Oil costs proceed to be undercut by tariff considerations, as President Trump just lately said that he intends to ship letters to dozens of US buying and selling companions inside one to 2 weeks, setting unilateral tariffs forward of the July 9 deadline that adopted his 90-day pause.

A decline in crude oil held worldwide on tankers is bullish for oil costs.  Vortexa reported Monday that crude oil saved on tankers which were stationary for at the least seven days fell by -13% w/w to 79.66 million bbl within the week ended June 20.

Wednesday’s EIA report confirmed that (1) US crude oil inventories as of June 20 have been -10.9% under the seasonal 5-year common, (2) gasoline inventories have been -2.8% under the seasonal 5-year common, and (3) distillate inventories have been -20.3% under the 5-year seasonal common.  US crude oil manufacturing within the week ending June 20 was unchanged w/w at 13.435 million bpd, modestly under the report excessive of 13.631 million bpd from the week of December 6.

Baker Hughes reported final Friday that lively US oil rigs within the week ending June 20 fell by -1 to a 3-3/4 12 months low of 438 rigs.  Over the previous 2-1/2 years, the variety of US oil rigs has fallen from the 5-1/4 12 months excessive of 627 rigs posted in December 2022. 

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