On May 22, July WTI crude oil prices dipped to a five-week low of $91.03 per barrel, down 3.38%, while July RBOB gasoline dropped to a six-week low of $3.1069 per gallon, a decline of 1.58%. This downward trend follows reports of a potential ceasefire agreement between the U.S. and Iran, which could reopen the crucial Strait of Hormuz, responsible for about 20% of global oil and LNG transit. Crude oil supply in the Persian Gulf has diminished by approximately 14.5 million barrels per day (bpd), with a projected drop in global crude stockpiles nearing a billion barrels by June.
As of mid-May, U.S. crude oil inventories were reported to be 1.7% below the seasonal five-year average, while gasoline and distillate inventories were 4.6% and 9.0% lower, respectively. Recent EIA data indicated a slight decline in U.S. crude production to 13.702 million bpd. The number of active U.S. oil rigs also rose by 10 to 425, marking the highest levels seen in 10.5 months, although this remains well below the peak of 627 rigs from December 2022.
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