Oil futures edged lower Tuesday, marking the third decline in four sessions as bullish momentum waned. The market's delicate balance has shifted, with bears testing the lower bounds of the current trading range while bulls defend critical July support levels.
OPEC's monthly report offered few surprises, maintaining its 2025 global oil demand growth forecast at 1.29 million barrels per day (bpd) alongside a 2.9% global economic growth projection. Despite persistent trade headwinds, the cartel anticipates stronger economic performance during 2025's second half. Refinery operations worldwide, particularly in the United States, are projected to sustain elevated run rates to meet seasonal transportation fuel demand.
The producer group's June output revealed significant developments: OPEC+ collectively boosted production by 349,000 bpd month-over-month. Saudi Arabia and UAE notably exceeded their quotas, with Saudi output climbing 173,000 bpd to 9.356 million bpd and UAE production rising 83,000 bpd to 3.05 million bpd. This output surge contrasts sharply with April-May's underproduction, dispelling market concerns about OPEC+'s commitment to planned supply increases. The cartel's persistently optimistic economic outlook appears calibrated to justify its robust demand projections and facilitate future production hikes.
Bearish sentiment strengthened following the API's inventory report, which showed unexpected builds in both crude and refined product stockpiles. Market participants now await confirmation from the EIA's weekly data; should it echo the API figures, additional downward pressure on crude benchmarks appears likely.
Notably, European and U.S. refined product markets displayed relative resilience during evening trading, suggesting peak-season consumption continues to offer underlying support. However, crude time spreads continued their softening trend, signaling easing supply tightness concerns. While the crude complex shows signs of fatigue after its recent rally, neither side has established decisive control. Traders should monitor key technical levels closely and maintain cautious positioning amid the intensifying tug-of-war.
Daily Price Movements: - WTI crude declined 0.69% to settle at $66.52/barrel - Brent crude fell 0.72% to $68.71/barrel - China's INE crude futures dropped 1.26% to 515.6 yuan/barrel - U.S. dollar index climbed 0.53% to 98.63 - USD/CNY rose 0.13% to 7.1428 - U.S. 10-Year Treasury notes declined 0.35% to 110.33 - Dow Jones Industrial Average retreated 0.98% to 44,023.29
Market Highlights: OPEC maintained its 2026 projections at 1.28 million bpd demand growth and 3.1% global economic expansion. The cartel anticipates OECD nations will contribute modest 100,000 bpd demand growth in 2025, while non-OECD countries drive the lion's share with 1.2 million bpd. Global refinery throughput surged by 2.1 million bpd in June to average 82.7 million bpd.
Middle East crude premiums retreated across the board: - Oman, Dubai and Murban differentials softened in Singapore trading - Cash Dubai's premium to swaps narrowed 28 cents to $2.98/barrel - Oman's official price declined to $70.35 from $72.59 - Kazakhstan reported 11.6% H1 production growth to 49.9 million tons while reaffirming OPEC+ commitment - Singapore bunker demand remained sluggish, forcing some suppliers to reduce barge operations
China's June energy data revealed significant shifts: - Crude processing volumes surged 8.5% year-over-year to 62.24 million tons, reversing May's 1.8% contraction - Daily refining throughput averaged 2.075 million tons - H1 processing volumes increased 1.6% to 361.61 million tons - Domestic crude production grew 1.4% annually to 18.2 million tons, though the pace slowed by 0.4 percentage points from May - H1 domestic output rose 1.3% to 108.48 million tons