On Thursday, June WTI crude oil closed at $0.15 higher, marking a +0.15% increase, while June RBOB gasoline fell by $0.0130, a decline of -0.36%. The rise in crude prices is attributed to ongoing tensions in the Middle East, particularly the stalemate in peace talks between the US and Iran, which is impacting global oil supply, especially through the strategically crucial Strait of Hormuz.
OPEC+ announced plans to gradually increase oil production through a series of quota hikes aimed at restoring a total of 2.2 million barrels per day (bpd). The group has already reinstated about 1.1 million bpd of the cuts made earlier in 2023, emphasizing their intention to complete these increases by the end of September. However, production concerns are heightened as the ongoing Iran conflict has prompted Persian Gulf producers to reduce output by about 6% due to storage limitations.
The International Energy Agency (IEA) reported a significant decline in global observed oil inventories, down by approximately 4 million bpd in March and April, and forecasted that the market could remain “severely undersupplied” until October. Goldman Sachs estimates a current disruption of about 14.5 million bpd in crude output from the Persian Gulf, contributing to a potential drawdown of nearly 1 billion barrels from global stockpiles by June.
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