August WTI crude oil (CLQ25) today are down -0.69 (-1.02%), and August RBOB gasoline (RBQ25) is down -0.0146 (-0.69%).

Oil prices are trading lower after Axios reported that the US plans to restart nuclear talks with Iran, which could eventually lead to reduced sanctions and increased Iranian oil exports.  Nuclear talks might also stave off any new military attack by Israel on Iran.  Also, the oil markets are nervous going into this Sunday's OPEC+ meeting, which is expected to result in a decision for higher production.

Oil prices also have from a new wildfire near an oil sands field in the Fort McMurray area, which reminded the markets of the vulnerability of Canadian oil production during wildfire season.

The oil market shook off the supportive June US payroll report of +147,000 and the -0.1 point decline in the June unemployment rate to 4.1%.

Concern about a global oil glut is negative for crude prices.  Last Wednesday, Russia stated that it is open to another output hike for OPEC+ crude production in August, when the group meets this Sunday.  On May 31, OPEC+ agreed to a 411,000 bpd increase in crude production for July, following the same 411,000 bpd hike for June.  Saudi Arabia has signaled that additional similar-sized increases in crude output could follow, which is viewed as a strategy to reduce oil prices and punish overproducing OPEC+ members, such as Kazakhstan and Iraq.  OPEC+ is boosting output to reverse the 2-year-long production cut, gradually restoring a total of 2.2 million bpd of production.  OPEC+ had previously planned to restore production between January and late 2025; however, production cuts won't be fully restored until September 2026.  OPEC June crude production rose +360,000 bpd to a 1.5-year high of 28.10 million bpd.

Gasoline prices have support from the American Automobile Association (AAA) projection that a record 61.6 million people will travel by car this Fourth of July holiday (June 28 to July 6), up +2.2% from last year and a sign of stronger gasoline demand.

Oil prices continue to be undercut by tariff concerns ahead of the July 9 deadline when President Trump says he will implement reciprocal tariffs on imports from any countries that haven't yet reached a trade deal with the Trump administration.

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 -8.7% w/w to 80.22 million bbl in the week ended June 27.

Wednesday's weekly EIA report was mixed for crude and products.  On the bullish side, EIA distillate stockpiles fell by -1.7 million bbl, a larger draw than expectations of -1.2 million bbl.  Also, crude supplies at Cushing, the delivery point for WTI futures, fell by -1.49 million bbl.  On the bearish side, EIA crude inventories unexpectedly rose +3.85 million bbl versus expectations for a -2.7 million bbl draw.  Also, EIA gasoline supplies rose by +4.19 million bbl, a larger build than expectations of +900,000 bbl.

Wednesday's EIA report showed that (1) US crude oil inventories as of June 27 were -9.3% below the seasonal 5-year average, (2) gasoline inventories were -0.7% below the seasonal 5-year average, and (3) distillate inventories were -21.0% below the 5-year seasonal average.  US crude oil production in the week ending June 27 was unchanged w/w at 13.433 million bpd, modestly below the record high of 13.631 million bpd from the week of December 6.

Baker Hughes reported last Friday that active US oil rigs in the week ending June 27 fell by -6 to a 3.75-year low of 432 rigs.  Over the past 2.5 years, the number of US oil rigs has declined from the 5.25-year high of 627 rigs reported in December 2022.