Recap: The oil market extended its previous losses on Wednesday in light of signs of increased tanker activity in the Strait of Hormuz. Ship-tracking data showed that three stranded supertankers, carrying 5 million barrels of crude, passed through the Strait of Hormuz on Wednesday, while U.S. Energy Secretary Chris Wright said about 20 million barrels of oil exited the Strait of Hormuz in the last day. The market was also pressured as the head of the U.N.’s IAEA said that the agency will carry out inspection in Iran soon following the interim peace agreement between the U.S. and Iran. The market posted a high of $73.18 on the opening and continued on its downward trend. The market sold off to a low of $69.63 ahead of the release of the EIA’s weekly petroleum stocks report. It retraced some of its losses in light of the 6 million barrel crude stocks draw. The market settled in a sideways trading range during the remainder of the session. The August WTI contract ended the session down $2.87 at $70.34 and the August Brent contract settled down $3.34 at $73.74. The product markets ended the session in mixed territory, with the heating oil market settling up 2.16 cents at $3.1762 and the RB market settling down 7.72 cents at $2.8818 following the builds in distillates and gasoline stocks of 3 million barrels and 2 million barrels, respectively.
Technical Analysis: The crude market will remain in its downward path amid easing supply concerns in light of the news of more oil tankers exiting the Strait of Hormuz. The market is seen finding support at $72.48, $70.17, $70.05, $67.50, $66.96, $63.86 and $63.16. Meanwhile, resistance is seen at $73.18, $74.07, $74.45, $78.14, $79.18, $80.15, $80.63, $81.00 to $81.68, $82.23 and $84.44.
Fundamental News: The EIA reported that U.S. total crude stocks fell to their lowest level since 1984 last week on strong refining demand and as the government released oil from its emergency reserve. U.S. crude stocks, including commercial and those in the Strategic Petroleum Reserve, fell by 15.1 million barrels to 743.3 million barrels in the week ended June 19th, the lowest level in more than 41 years. Commercial oil inventories fell by 6.1 million barrels to 412.1 million barrels, their lowest level since January 2025. Stocks in the SPR fell by 9.05 million barrels to 331.2 million barrels last week, the lowest level since June 1983.
Goldman Sachs expects U.S./European Union diesel margins to moderate to $46/$31 per barrel by the fourth quarter. It maintained its U.S./EU gasoline margins forecast for the fourth quarter at $23/$13. The bank expects Persian Gulf exports to normalize by the end of July compared with its previous assumptions of the end of August. It expects the average 2027 U.S./EU diesel margins at $38/$25 per barrel and average 2027 U.S./EU gasoline margins at $22/$15 per barrel.
J.P. Morgan lowered its second-half 2026 Brent crude oil price forecast due to lower-than-expected OECD commercial inventory draws and lower demand for oil. The bank sees Brent averaging $86/barrel in the third quarter, $80/barrel in the last quarter, and expects to exit 2026 at $78/barrel. J.P. Morgan said OECD commercial inventories draws have come in below expectations, while demand losses have been larger than expected, implying materially less upward pressure on oil prices. The bank said the market has rebalanced through a meaningfully different mix of demand losses and inventory withdrawals than it initially assumed. J.P. Morgan said oil flows are currently running at roughly 8.6 million bpd and have averaged 6.3 million bpd so far in June, materially above April and May levels. J.P. Morgan said in its second-half forecast, it expects OECD inventories to continue to draw by an additional 50 million barrels between April and July. The bank said given the scale of the projected oversupply in the fourth quarter and first half of 2027, production would likely need to be curtailed in early 2027, following a period of maximized output in late 2026.
Early Market Call – as of 7:00 AM EDT
WTI – July $69.36, down 51 cents
RBOB – July $2.8883, up 1.92 cents
HO – July $3.1264, down 2.96 cents
