July WTI crude oil closed down $2.50 (-2.69%) on Friday, while July RBOB gasoline rose $0.0076 (+0.25%). The decline in crude prices was driven by hopes for a peace settlement between the U.S. and Iran, which could allow the Strait of Hormuz—critical for oil transport—to reopen. Concurrently, the dollar index reached a 1.75-month high, contributing to lower oil prices.
China’s crude imports in May dropped to 6.7 million barrels per day (bpd), the lowest in over a decade, further pressuring crude prices. The International Energy Agency reported that global oil inventories decreased by approximately 4 million bpd in March and April, projecting the market to remain “severely undersupplied” until October. Goldman Sachs noted that crude output in the Persian Gulf has been curtailed by about 14.5 million bpd amid ongoing conflicts, with global stockpiles potentially decreasing by nearly 1 billion barrels by June.
Additionally, Baker Hughes reported an increase in active U.S. oil rigs, with a rise of 2 to 431 rigs, marking an 11-month high. Meanwhile, U.S. crude oil production for the week ending May 29 declined slightly by 0.1% to 13.707 million bpd, close to the record high of 13.862 million bpd from November 2022.
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