July WTI crude oil (CLN26) on Friday closed down -2.82 (-3.23%), and July RBOB gasoline (RBN26) closed down -0.0516 (-1.66%).
July WTI crude oil costs on Friday fell by -3.23%, including to Thursday’s decline of -2.58%. Crude oil costs fell as reviews circulated that an interim US-Iran peace settlement may very well be signed as early as this weekend, ending the army hostilities, reopening the Strait of Hormuz, and ending the US blockade on Iran and its oil exports. Negotiations would then start on the extra intractable points, similar to sanctions in opposition to Iran, the discharge of $24 billion of frozen Iranian property, and the decision of Iranian nuclear points. Nevertheless, Iran mentioned its leaders nonetheless must make a closing choice on the proposed interim peace deal.
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Oil costs fell sharply beginning on Thursday after President Trump mentioned he canceled deliberate army strikes in opposition to Iran, citing “discussions” with the Iranian management. He added {that a} “time and place of the signing” of a negotiated finish to the warfare would “be introduced shortly.”
Crude costs had been additionally pressured by claims of rising oil flows by the Strait of Hormuz. President Trump mentioned the US army had supported the passage of “greater than 200 business ships” by the Strait of Hormuz, leading to “greater than 100 million barrels of oil” making it to market.
The outlook for increased US crude output is unfavourable for oil costs. The Division of Power (DOE) on Tuesday raised its US 2026 crude manufacturing estimate to 13.72 million bpd from a Could estimate of 13.65 million bpd.
Crude costs have help from the continued Ukrainian drone assaults on Russian oil infrastructure. Final Monday, Bloomberg reported that Russia banned jet gasoline exports after Ukraine’s assaults on Russian oil refineries reached a report excessive in Could. Russia’s refinery runs in Could fell -13% y/y to 4.58 million bpd, the bottom since October 2009, based on information from Bloomberg. US and EU sanctions on Russian oil firms, infrastructure, and tankers have additionally curbed Russian oil exports.
The Worldwide Power Company (IEA) mentioned in a month-to-month report launched in Could that world oil inventories declined at about 4 million bpd in March and April, and that the market will stay “severely undersupplied” till October, even when the battle ends quickly. Goldman Sachs estimates that crude output within the Persian Gulf has been curtailed by about 14.5 million bpd, and that the present disruption has drawn down almost 500 million bbl from world crude stockpiles, which may hit a billion bbl by June.
As a bearish issue for crude, OPEC delegates mentioned on Could 14 that the cartel goals to proceed a collection of oil quota will increase over the subsequent few months, finishing the return of halted oil manufacturing by the top of September. The group already formally agreed to revive about two-thirds of the 1.65 million bpd provide cutback it made again in 2023 and mentioned it plans to lift output targets additional and to revive the ultimate portion in three extra month-to-month levels. On Could 3, OPEC+ mentioned it should increase its crude output by 188,000 bpd in June after elevating manufacturing by 206,000 bpd in Could, though any manufacturing hike now appears unlikely provided that Center East producers are being pressured to chop manufacturing as a result of Center East warfare. OPEC’s Could crude manufacturing fell by -3.36 million bpd to a 40-year low of 16.33 million bpd.
Vortexa reported on Monday that crude oil saved on tankers which have been stationary for at the very least 7 days rose +1.2% w/w to 86.59 million bbl within the week ended June 5.
Wednesday’s EIA report confirmed that (1) US crude oil inventories as of June 5 had been -5.3% beneath the seasonal 5-year common, (2) gasoline inventories had been -5.9% beneath the seasonal 5-year common, and (3) distillate inventories had been -13.9% beneath the 5-year seasonal common. US crude oil manufacturing within the week ending June 5 rose +0.7% w/w to 13.799 million bpd, mildly beneath the report excessive of 13.862 million bpd posted within the week of November 7.
Baker Hughes reported on Friday that the variety of lively US oil rigs within the week ended June 12 rose by +2 to an 11-month excessive of 433 rigs, up from the 4.25-year low of 406 rigs posted in December 2025. Nevertheless, the variety of US oil rigs stays sharply beneath the 5.5-year excessive of 627 reported in December 2022.
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