Oil Rises on Near-Term Tightness but Outlooks Cap Gains


   
Karim Bastati
DTN Analyst

   VIENNA (DTN) -- Oil futures rose Friday morning after slipping 2% on 
Thursday as the International Energy Agency flagged a tighter-than-expected 
crude oil market in the near term in their latest monthly oil market report 
published this morning. At the same time, the agency sees an even higher risk 
of oversupply later in the year, capping gains.

   NYMEX-traded WTI for August was up $0.70 bbl to trade near $67.27 bbl, and 
ICE Brent for September delivery gained $0.68 bbl to $69.32 bbl.

   August RBOB gasoline futures rose $0.0078 to $2.1602 gallon, and the 
front-month ULSD futures contract added $0.0341 to trade near $2.4176 gallon.

   The U.S. dollar index gained 0.153 points to 97.475.

   IEA pointed to strong refining margins and a steep backwardation in the 
front end of crude oil futures forward curves as evidence of a currently 
tighter-than-expected market. So far, increased summer demand for 
transportation fuels and crude for direct burning has outweighed the effect of 
increased supplies from OPEC+.

   At the same time, IEA saw surging global oil stocks in May and reported that 
preliminary data suggest the same for June, adding to oversupply concerns. 
However, the surge in crude inventories was mostly concentrated in China, where 
a new energy security policy is incentivizing stock builds.

   The newest report contained yet another downward revision to global oil 
demand growth forecasts. The agency now estimates 700,000 bpd of global demand 
growth this year and 720,000 bpd in 2026. Given OPEC's strategic shift and 
growing non-OPEC output, IEA estimates global supply to grow by 2.1 million bpd 
in 2025, leading to a global surplus of 700,000 bpd this year.




(c) Copyright 2025 DTN, LLC. All rights reserved.