On September 22, 2023, WTI crude oil prices closed at $65.00, down 1.32%, while RBOB gasoline prices fell 0.58% to $2.07. The decline in crude and gasoline prices was driven by a stronger US dollar and reduced optimism regarding potential US trade deals, with President Trump indicating only a 50% chance of reaching an agreement with Europe before the upcoming deadline.
Factors negatively impacting energy demand included a surprise 0.7% decline in US June capital goods new orders, contrary to expectations for a 0.1% increase. Additionally, Iraq’s plan to resume 230,000 bpd crude exports through the Iraq-Turkey pipeline contributed to concerns over surplus supply, particularly after OPEC+ agreed to increase production by 548,000 bpd starting August 1, exceeding prior expectations.
Further supporting oil prices, however, was the European Union’s recent approval of additional sanctions on Russian oil, amidst concerns over a global glut in production. Despite the challenges, US crude oil inventories as of July 18 were reported 8.6% below the seasonal 5-year average, while active US oil rigs decreased to a 3.75-year low of 415 rigs as of July 22.
