June WTI crude oil (CLM25) today is up +0.19 (+0.30%) and June RBOB gasoline (RBM25) is down -0.00082 (-0.38%).

Crude oil prices today recovered from early losses and are moving higher on the decline in the dollar index (DXY00) to a 1-week low.  Crude also has support over doubts that a nuclear deal can be reached between Iran and the US.

Crude prices today initially moved lower after Moody's Ratings downgraded its rating on US debt, which sparked risk-off sentiment in asset markets.  Crude prices are also under pressure as today's phone call between President Trump and Russian President Putin may ease geopolitical risks and lead to a ceasefire in Ukraine.

Doubts that a nuclear deal between Iran and the US can be achieved are supporting crude oil prices.  Iranian Supreme Leader Ali Khamenei accused US President Trump of dishonesty and power abuse, and President Trump said Iran will face "something bad" if it doesn't quickly accept a US proposal over its nuclear program.

Crude has support on the outlook for smaller global oil supplies after the US State Department recently slapped sanctions on an international network that facilitated the shipment of millions of barrels of Iranian oil to China.  The State Department sanctioned the alleged Iranian front company called Sepehr Energy Jahan Nama Pars for using revenue from the sales of crude to fund the development of weapons, including ballistic missiles and drones, nuclear proliferation, and Iran's "terrorist proxies."

The prospects for improved US gasoline demand are supportive of crude prices.  According to the American Automobile Association, it projects that 39.4 million Americans will travel by car this Memorial Day weekend, up +3.1% from last year because US gasoline costs are 50 cents a gallon cheaper than last year.

Concern about a global oil glut is negative for crude prices after OPEC+ on May 3 agreed to raise its crude production level by 411,000 bpd in June.  In a move that could further pressure crude prices, Saudi Arabia 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, but now that production cut won't be fully restored until September 2026.  OPEC Apr crude production fell -200,000 bpd to 27.24 million bpd.

An increase in crude oil held worldwide on tankers is bearish for oil prices.  Vortexa reported today that crude oil stored on tankers that have been stationary for at least seven days rose by +3.1% w/w to 90.97 million bbl in the week ended May 16.

In a supportive factor for crude oil prices, the US on January 10 imposed new sanctions on Russia's oil industry that could curb global oil supplies.  Russian oil product exports in March rose to a 5-month high of 3.45 million bpd, according to data compiled by Bloomberg from analytics firm Vortexa.  Weekly vessel-tracking data from Bloomberg showed Russian crude exports rose by +140,000 bpd w/w to 3.48 million bpd in the week to May 11.

Last Wednesday's EIA report showed that (1) US crude oil inventories as of May 9 were -6.5% below the seasonal 5-year average, (2) gasoline inventories were -2.8% 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 May 9 rose +0.1% w/w to 13.387 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 May 16 fell -1 to 473 rigs, just above the 3-1/4 year low of 472 rigs posted on January 24.  The number of US oil rigs has fallen over the past two years from the 5-year high of 627 rigs posted in December 2022.