On Friday, June WTI crude oil closed up $4.25 (+4.20%), marking a 1.5-week high, while June RBOB gasoline rose by $0.0962 (+2.67%). This spike in prices follows a lack of progress in US-Iran peace negotiations, which have resulted in the closure of the Strait of Hormuz, further tightening global oil supplies.
The International Energy Agency (IEA) reported a decline in global oil inventories by 4 million barrels per day (bpd) in March and April, predicting the market will remain “severely undersupplied” until October. Goldman Sachs estimates that crude output in the Persian Gulf has been reduced by 14.5 million bpd, and about 500 million barrels have been drawn down from global crude stockpiles, potentially reaching 1 billion barrels by June.
In the week ending May 8, US crude oil production rose by 1.0% to 13.710 million bpd, although still below the record high of 13.862 million bpd. Meanwhile, US crude oil inventories are 0.3% below the seasonal 5-year average, with distillate inventories down 9.4% from the same period.
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