Written Commentary
Ag Market View for July 8.25
July 8, 2025
CRUDE OIL
July Crude Oil is near unchanged this morning as this weeks’ rally stalled yesterday. Geopolitical tensions are supportive, but there could be enough concern about demand to limit the market’s gains. The Iran nuclear talks have stalled and the Russia/Ukraine war is heating up, so the possibility of sanctions against those two nations being reduced look more remote than a week ago. The Trump Administration has told US trading partners to present their “best offers” regarding trade by today, and if nothing comes of that, it could be met with a shrug or could be viewed as more evidence of economic headwinds that will slow energy demand. OECD lowered its forecasts for global economic growth for 2025 and 2026 to 2.9% from its March forecasts of 3.1% and 3.0%, respectively. This would be down from 3.3% in 2024. Russia’s oil and gas revenue declined by 35% in May from a year prior, and this could make them resistant to further OPEC+ oil output hikes. The API report last night was on the bullish end of expectations for crude oil and bearish for the products. The report showed US crude oil stocks -3.3 million barrels for the week ending May 30 versus the Reuters poll calling for -1.0 million. API gasoline stocks were +4.7 million barrels versus +1.0 million expected, and distillates were +760,000 versus +600,000 expected. The EIA report comes out later this morning and in addition to the expectations for the stocks data, the trade is also looking for refinery runs to be +0.8% last week to 91%
NATURAL GAS
July Natural Gas is lower this morning but inside yesterday’s range. A generally slow start to the summer cooling season has limited demand so far. US gas storage levels have crept above the five-year average but are still well below a year ago. That being said, weekly injection rates have been above average rates for the past four weeks. For this week’s report, the early Reuters poll calls for storage a net injection of 95 to 126 bcf for the week ending May 30. The five-year average change for the week is +100. The 6-10 and forecast shows a mix of below normal temperatures in the central US and above normal in the west and along the Atlantic and Gulf Coasts.
PRODUCTS
The API report showed larger than expected increases in US gasoline and distillate stocks last week, which may increase the focus on today’s EIA report. Today’s report may also provide a hint about gasoline demand this summer, as Memorial Day is considered the official start of the summer driving season.
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