August WTI crude oil prices fell by $1.01 (-1.50%) and August RBOB gasoline prices decreased by $0.0306 (-1.44%) as both commodities experienced a second consecutive day of declines. Gasoline prices have dropped to a 2-week low amidst concerns that President Trump’s upcoming tariff policies may slow global economic growth and reduce energy demand. The Richmond Fed’s manufacturing index for July unexpectedly fell to an 11-month low of -20, further dampening economic outlooks.
Additionally, Iraq plans to resume crude exports from its northern Kurdish region, which had been halted since March 2023, with expectations of supplying 230,000 barrels per day (bpd) once exports resume. In contrast, on July 5, OPEC+ agreed to increase production by 548,000 bpd starting August 1, contributing to the concerns of a potential global oil glut, especially as the International Energy Agency indicated a growing surplus in the market by Q4-2025.
On a positive note for prices, crude oil stored on tankers fell by 14% week-on-week to 66.31 million barrels. Reports from the EIA showed a drop in US crude inventories by 3.859 million barrels for the week ending July 11, making US crude production slightly below recent record highs. However, Baker Hughes reported a decrease in active US oil rigs to a 3.75-year low of 422 rigs, highlighting ongoing contraction in US oil production capacity.
