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On July 4, August WTI crude oil closed at $70.63 per barrel, up 0.07%, while August RBOB gasoline rose 0.13% to $2.25 per gallon. Crude prices reached a two-week high following comments from UAE Energy Minister Suhail Al Mazrouei about the need for larger OPEC+ output due to a lack of inventory buildups. However, prices were pressured by an unexpected increase in weekly EIA crude inventories, which rose by 7.1 million barrels, exceeding expectations of a 1.6 million barrel draw.
OPEC+ is set to increase crude production by 548,000 barrels per day starting August 1, surpassing initial forecasts. Consequently, US oil production as of July 4 fell by 0.4% to 13.385 million barrels per day. Overall, US crude oil inventories were reported to be 8.0% below the five-year seasonal average, while gasoline inventories were 1.2% below, and distillate stocks plummeted to a 20-year low. Additionally, the Baker Hughes report indicated a decrease in active US oil rigs to 425, the lowest in 3.75 years.
Heightened tensions in the Middle East, specifically attacks by Yemen’s Houthi rebels on merchant ships, have also influenced market conditions. The potential for increased shipping costs and risks may further affect crude supply from the region.
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