Oil Price - July 3

[dan_s]

WTI closed at $57.43 on July 3, up $1.18 on the day. The day's trading range was $56.25 to $57.44 on pre-holiday light trading volume.

WTI dropped shortly after the EIA weekly report showed a smaller drop in crude oil inventories than the API report. After the dip it rebounded to close just a penny off the high for the day. Lots of short covering the day before a holiday.

There is a lot of noise in the market but supply/demand fundamentals do project a tightening oil market this quarter. The U.S. vs China "Tariff War" seems like it will never end, but my guess is that it will end before Christmas. Iran seems hell bent on provoking a war with the U.S. Surely they know that Israel and the U.S. will not let them move closer to a nuke. Anyone working in an Iranian uranium enrichment facility needs to have a lot of life insurance.

OPEC reported the lowest monthly oil production in five years for June.

IMO the key takeaway from the EIA's last four weekly petroleum reports is that U.S. oil production growth has flattened out. Gasoline and Jet Fuel inventories are "dangerously low" and hurricane season is just ahead. Plus, the fire at the PA refinery has taken out a large source of NE gasoline supply making the nation even more exposed to fuel shortage if a hurricane takes out Gulf Coast refining capacity.