**July WTI crude oil prices fell by $2.71 (-2.81%) to a 2.5-week low, while July RBOB gasoline dropped by $0.2046 (-6.10%), reaching a 5-week low on Tuesday.** The decline in crude prices is attributed to improving peace negotiations between the U.S. and Iran, with a Washington Post report indicating a 60-day ceasefire extension, potentially allowing the Strait of Hormuz to reopen.
According to Goldman Sachs, crude output in the Persian Gulf has decreased by approximately 14.5 million barrels per day (bpd), contributing to a drawdown of nearly 500 million barrels from global crude inventories, which could reach one billion barrels by June. Meanwhile, OPEC plans to increase oil production targets, aiming to restore the majority of its 1.65 million bpd cutbacks by the end of September.
In the U.S., as of May 15, crude oil inventories were down 1.7% from the seasonal 5-year average, and gasoline inventories were down 4.6%. Active oil rigs in the U.S. rose by 10 to a 10.5-month high of 425 rigs, reflecting a recovery from a 4.25-year low of 406 rigs in December 2022.
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