The oil market continued to edge lower yesterday, with a stronger US dollar providing some headwinds. In addition, no immediate action from the US against Russia following President Trump’s “major statement” means that the focus returns to the expected oil surplus later in the year.
Numbers overnight from the American Petroleum Institute (API) were fairly neutral. US crude oil inventories reportedly increased by around 800k barrels over the last week. Meanwhile, gasoline and distillate stocks increased by 1.9m barrels and 800k barrels, respectively.
OPEC reported no change to the group’s supply and demand outlook in yesterday’s release of its monthly market report. Global oil demand growth is unchanged for this year and next at 1.29m b/d and 1.28m b/d, respectively. Meanwhile, non-OPEC+ supply is also unchanged for 2025 at 810k b/d and 2026 at 730k b/d, respectively.
In June, OPEC supply increased by 220k b/d month on month to 27.24m b/d, as the group gradually unwinds supply cuts. However, in numbers reported directly by member countries, Saudi Arabia changed the way it reported its supply — using supply to market rather than its actual production numbers. Its actual production number was 392k b/d above its supply to the market. Without this change, the Saudis would’ve exceeded their production target by 385k b/d in June.
Meanwhile, Kazakhstan, which produced 347k b/d above its production target for June, reported it has no plans to exit the OPEC+ alliance, saying it offers stability to the oil market. Kazakhstan has consistently produced above its production targets for months amid the ramp-up of output from the expansion of the Tengiz field.