September WTI crude oil (CLU25) today is down -0.70 (-1.09%), and September RBOB gasoline (RBU25) is down -0.044 (-0.21%).

Crude oil prices are trading lower in light summer trading on the possibility of progress in the Trump-Putin summit in Alaska on Friday, which could result in reduced sanctions on Russian oil.  The oil markets also remain concerned about an oversupply of oil through year-end.

Bullish factors today include the slightly lower dollar and President Trump's 90-day postponement of the higher tariffs on China, which was a supportive factor for global economic growth and energy demand.

Crude has support after President Trump recently said that he would impose new tariffs on countries buying Russian energy unless Russia reaches a ceasefire with Ukraine.  Last Wednesday, President Trump doubled tariffs on Indian exports to 50% from 25% because of India's purchases of Russian crude.  JPMorgan Chase warned that if enforced, oil markets would be unable to ignore the impact of triple-digit tariffs on Russian oil, given the significant scale of Russian exports and limited OPEC spare capacity, which could potentially lead to a supply shock.    

Concerns about a global oil supply glut are weighing on crude prices after OPEC+ on August 2 endorsed an additional 547,000 bpd increase in its crude production for September 1.  OPEC+ is boosting output to reverse the 2-year-long production cut, gradually restoring a total of 2.2 million bpd of production by September 2026.  OPEC+ has 1.66 million bpd of supplies that are currently due to remain offline until late 2026.  The International Energy Agency has said the global crude oil market faces a surplus by Q4-2025 equivalent to 1.5% of global crude consumption.  OPEC July crude production fell -20,000 bpd to 28.31 million bpd.

A decline in crude oil held worldwide on tankers is bullish for oil prices.  Vortexa reported Monday that crude oil stored on tankers that have been stationary for at least seven days fell by -5% w/w to 80.52 million bbl in the week ended August 8.

Last Wednesday's weekly EIA report showed that (1) US crude oil inventories as of August 1 were -6.5% below the seasonal 5-year average, (2) gasoline inventories were -0.3% below the seasonal 5-year average, and (3) distillate inventories were -16.1% below the 5-year seasonal average.  US crude oil production in the week ending August 1 fell -0.2% w/w to 13.284 million bpd, modestly below the record high of 13.631 million bpd posted in the week of 12/6/2024.

Baker Hughes reported last Friday that the number of active US oil rigs in the week ending August 8 rose by +1 rig to 411 rigs, just above the 3.75-year low of 410 rigs from August 1.  Over the past 2.5 years, the number of US oil rigs has fallen sharply from the 5.25-year high of 627 rigs reported in December 2022.