Recap: The crude market on Tuesday fell for the third consecutive session as the prospect of increased output and easing demand kept buyers at bay. Analysts see inventories rising as OPEC production increases at a time when U.S. tariffs will likely impact demand. The market is concerned of a trade war between the U.S. and European Union will cut fuel demand growth by cutting economic activity. The European Union is exploring possible counter measures against the U.S. as prospects for an acceptable trade agreement with the U.S. fade. The U.S. has threatened to impose a 30% tariff rate if a deal is not reached. The oil market posted a high of $67.13 before it breached its support line at $66.76 and sold off to a low of $65.99 in afternoon trading. The expiring August contract market retraced some of its losses ahead of the close and went off the board down 99 cents at $66.21. The September WTI contract settled down 64 cents at $65.31, while the September Brent contract settled down 62 cents at $68.59. The product markets ended the session lower, with the heating oil market settling down 5.74 cents at $2.4518 and the RB market settling down 3 cents at $2.1019.
Technical Analysis: The oil market on Wednesday will seek further direction from the weekly petroleum stocks reports, which are expected to show draws across the board. The market will also remain headline driven as it focuses on the tariff deadline. The market, basis the September contract, is seen finding support at $64.82, $64.38, $64.10, $63.93 followed by $63.42, $63.11 and $62.84. Meanwhile, resistance is seen at $64.82, $66.44, $67.54 and $68.16.
Fundamental News: U.S. House of Representatives Speaker Mike Johnson said he does not think the U.S. Congress should consider sanctions on Russia until after President Donald Trump’s 50-day deadline for Russia to end the war in Ukraine. Some members of Congress have been pushing for sanctions on Russia, including a Senate bill with 85 co-sponsors from both parties that would impose 500% tariffs on countries that buy Russian oil, gas, uranium and other exports.
Axios reported that U.S. Syria envoy Tom Barrack will lead a meeting with senior officials from Israel and Syria on Thursday. It is unclear where the meeting will take place, but is expected to focus on security arrangements in southern Syria and increasing coordination and communication.
North Dakota’s Industrial Commission reported that the state’s oil production fell 61,000 bpd to 1,113,000 bpd in May.
The EIA reported that the U.S. became a net exporter of crude oil to Nigeria in February and March, as crude demand on the U.S. East Coast slowed due to refinery maintenance and the Dangote refinery drove up Nigeria’s demand for inputs. This is the first time that the U.S. has exported more crude oil to Nigeria than it imported. Gross U.S. exports of crude to Nigeria touched 111,000 bpd in February and 169,000 bpd in March. Imports, which were at 133,000 bpd in January, fell to 54,000 bpd and 72,000 bpd in February and March respectively.
Vortexa reported Monday that crude oil stored on tankers that have been stationary for at least seven days fell by 14% w/w to 66.31 million bbl in the week ended July 18th.
U.S. President Donald Trump said that China’s President Xi Jinping had invited him to China and he would probably meet him in the not too distant future.
Early Market Call – as of 9:00 AM EDT
WTI – Sep $65.02, down 44 cents
RBOB – Aug $2.1098, up 71 points
HO – Aug $2.4377, down 68 points
