Crude oil prices climbed 2.85% to settle at 5,881 as investors balanced signs of short-term tightness with a longer-term surplus outlook flagged by major forecasting agencies. The IEA noted that while refinery runs are peaking this summer to meet robust travel and power generation demand, its revised forecast points to supply growth outpacing demand growth for 2025—suggesting an eventual surplus. Meanwhile, Russia’s commitment to compensate for its OPEC+ overproduction during August–September is lending additional support to near-term prices. Adding to signs of solid prompt demand, Saudi Arabia is poised to ship around 51 million barrels to China in August, the largest monthly volume in over two years.
On the supply side, the EIA’s latest data painted a mixed picture. U.S. crude stocks unexpectedly surged by 7.1 million barrels last week to 426 million barrels, defying forecasts of a draw, with stocks at Cushing also rising slightly. However, gasoline inventories dropped by 2.7 million barrels, deeper than expected, while distillate stocks fell by 825,000 barrels, indicating healthy downstream demand amid high refinery utilization rates. Net U.S. crude imports also dropped significantly by 1.36 million barrels per day.
Technically, the market is under short covering, highlighted by a 5.43% drop in open interest to 9,883 contracts as prices rose by 163. Crude oil is now getting immediate support at 5,769; a break below could push prices toward 5,656. Resistance is pegged at 5,942, with further strength likely to test 6,002.
