Crude Oil WTI Futures Market News and Commentary
Aug WTI crude oil (CLN19) on Monday closed up +0.47 (+0.82%), and Aug Brent crude oil (CBQ19) closed down -0.346 (-0.52%). Aug RBOB gasoline (RBN19) closed up +0.0011 (+0.06%). The energy complex settled mixed Monday with Aug WTI crude and Aug RBOB gasoline climbing to 3-week highs. A slump in the dollar index Monday to a 3-month low was supportive for energy prices. Also, gasoline prices are still underpinned by supply concerns after a fire and explosion shuttered gasoline output last Friday at the Philadelphia Energy Solutions oil refinery, the largest refinery on the U.S. East Coast with processing capacity of 350,000 bpd of crude oil. Robust U.S. gasoline demand is supportive for prices after the EIA reported that U.S. gasoline demand rose +0.5% w/w for the week of June 14 to a record 9.928 million bpd. Crude oil fell back from its best levels on President Trump's tweet, "why are we protecting the shipping lanes for other countries in the Strait of Hormuz, as China gets 91% of its oil from the Strait an Japan gets 62% of its oil from there, so why are we protecting the shipping lanes for other countries for zero compensation." President Trump's comment suggested an aversion to a further buildup of the U.S. military in the Persian Gulf to protect international oil shipping. However, simmering US/Iran tensions are still a bullish factor for energy prices after Iran's navy on Monday warned that another U.S. drone could be shot down if intrusions into its airspace continue. Also, the Trump administration slapped sanctions on eight senior Iranian Revolutionary Guard commanders as well as Iran's supreme leader Ayatollah Ali Khamenei, which could draw retaliation from Iran. Last Wednesday's EIA data showed that U.S. crude oil inventories as of June 14 were a hefty +8.3% above the 5-year average, gasoline inventories were +1.3% above the 5-year average, and distillate inventories were -5.3% below the 5-year average.