On Monday, July WTI crude oil closed up 0.76% at $CLN26, while July RBOB gasoline increased by 0.81%. The surge in crude oil prices follows recent escalations in hostilities between Iran and Israel, marked by Israeli strikes on military targets in Iran amidst heightened tension, complicating peace negotiations.
Additionally, Iranian crude imports dropped to a 10-year low of 6.7 million bpd in May. The International Energy Agency noted a decline in global oil inventories of about 4 million bpd for March and April, predicting that the market will remain undersupplied until October. Goldman Sachs estimates disruptions in the Persian Gulf have drawn down nearly 500 million barrels from global stockpiles, with potential declines reaching 1 billion barrels by June.
Despite these factors, the ongoing bearish sentiment is influenced by OPEC’s plans to increase oil production, as their output fell to a 40-year low of 16.33 million bpd in May. The number of active US oil rigs rose to 431, indicating a recovery trend in US drilling activities.
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