Written Commentary
CRUDE OIL
July Crude Oil was higher early Monday after President Trump on Sunday said Iran’s response to last week’s US peace proposal was “unacceptable.” The market remains volatile and is apparently vulnerable to any suggestion that the Strait of Hormuz will be opened, only to rally again when those hopes are dashed. In the meantime, the impacts of the cutoff of roughly 20% of the world’s oil can be expected to increase. Saudi Aramco said it will ship about 10 million barrels of oil to its customers in China next month, roughly 333,333 barrels per day (bpd), which according to Reuters and Kpler data would be a record low. Saudi shipments to China averaged 1.39 million bpd in 2025.
PRODUCTS
July RBOB was higher early Monday on the lack of progress in the negotiations with Iran. Unlike crude oil US product stocks are relatively tight.
NATURAL GAS
July Natural Gas was higher early Monday but had yest inside Friday’s range. The market may have put in a low last week but has yet to make much progress on that move. The theme of high US production and low demand may be playing itself out as the market approaching the cooling season. The mild winter and spring allowed US stocks to build at a faster than normal rate, but US production has slowed in recent weeks. LSEG said average gas output in the U.S. Lower 48 states fell to 109.3 billion cubic feet per day so far in May, down from 109.5 bcfd in April and the record 110.6 bcfd in December. The 6-10 and 8-14 day maps show above normal temperatures covering most of the lower 48, with the exception of some normal temps in the far northwest.
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