Crude OilPrices Drop Sharply Amid Stabilizing Global Supplies

July WTI crude oil (CLN26) closed down -4.70 (-5.83%), while July RBOB gasoline (RBN26) fell -0.0667 (-2.26%). Prices reached a 3.5-month low for crude and a 3.25-month low for gasoline on Tuesday. The decline began after the U.S.-Iran agreement to end their conflict and reopen the Strait of Hormuz, with losses accelerating later when reports surfaced about Iran’s immediate oil sales.

Goldman Sachs revised its Brent crude forecast to $80 per barrel for Q4, down from $90, expecting Persian Gulf exports to rebound to pre-war levels by late July. Approximately 68 million barrels of Iranian crude remain stranded in the Gulf, with 600 vessels still blocked.

U.S. crude output rose to 13.72 million barrels per day (bpd), but supply concerns persist due to reduced Russian output from Ukrainian drone attacks. Russian production averaged 4.32 million bpd in early June, the lowest in two decades, as attacks damaged infrastructure. Ukrainian forces struck three fuel facilities this month.

OPEC+ plans to restore nearly two-thirds of a 1.65 million bpd production cut by September, though disruptions in the Middle East may delay this. Vortexa noted a 6.9% drop in crude stored on stationary tankers, signaling reduced supply pressure.

U.S. inventories remain below seasonal averages, with crude down 5.3% and gasoline down 5.9%. Active oil rigs hit an 11-month high of 433, though still below pre-2022 levels. Analysts expect EIA data to show further inventory declines this week.

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