On Friday, June WTI crude oil closed up by $0.61 (+0.64%) and June RBOB gasoline increased by $0.0707 (+2.05%). The rise in prices is attributed to renewed tensions between the US and Iran following the seizure of an oil tanker by Iran in the Strait of Hormuz, claiming it was attempting to disrupt Iranian oil exports. This escalating conflict has raised concerns about the security and open passage of this crucial shipping route, which handles about 20% of the world’s oil and liquefied natural gas.
The US military has targeted Iranian sites responsible for recent attacks on US Navy vessels and disabled two Iranian-flagged oil tankers in the strait. Goldman Sachs estimates that approximately 14.5 million barrels per day (bpd) of crude output from the Persian Gulf has been disrupted, and the International Energy Agency highlights that over 80 energy facilities have sustained damage amid the conflict. As a result, OPEC+ plans to boost crude production by 188,000 bpd in June despite the challenges imposed by the ongoing war.
In additional energy news, the active US oil rig count rose by 2 to 410 rigs, slightly above a 4.25-year low. US crude inventories as of May 1 were 0.7% above the seasonal five-year average, while gasoline inventories were down 3.1%, reflecting ongoing supply constraints amidst geopolitical tensions.
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