Written Commentary
Ag Market View for July 8.25
July 8, 2025
NATURAL GAS
July Natural Gas is close to taking out the May lows this morning, and a break below there could inspire a test of the April lows. The EIA storage report was a little bearish against expectations yesterday, with storage up 101 bcf from the previous week versus expectations for an increase of 94. Storage was down -11.7% from a year ago and 3.4% above the five-year average versus -12.7% and +3.5% the previous week. LSEG said yesterday that average gas output in the Lower 48 US states fell to 105.0 billion cubic feet per day so far in May, down from a monthly record of 105.8 bcfd in April. The NWS 6-10 day forecast has above normal temperatures dominating in the eastern US from the Midwest to the East Coast, with mostly normal out west. The 8-14 day has more areas of above normal with a pocket of below or near normal centered on the Plains. There could be some extreme heat in the southeast and New England. So far this season, temperatures have leaned moderate, but it is still early.
CRUDE OIL
July Crude Oil is lower this morning but so far is holding above this week’s low at $60.02. OPEC+ ministers meet this weekend, and the group is widely expected to lift their allowed production another 411,000 barrels per day for July. This follows similar increases for May and June that initially took the market by surprise given that they were 2-3 times larger than had been anticipated. Yesterday, an appeals court temporarily reinstated the Trump tariffs after a lower court had declared that some of them were illegal the day before. It looks light this is heading to the Supreme Court, and the back and forth only add to the uncertainty about oil demand. Sources told CNN that mediators in the US/Iran nuclear talks were close to an agreement that could be achieved the next time the two sides meet. There is no indication of when that will occur, but an agreement could open Iranian crude supply to the world market. Yesterday’s EIA report had crude oil, distillate, and gasoline stocks all coming in at the bullish end of expectations, but that only provided a temporary lift to the futures.
PRODUCTS
Refinery activity fell last week instead of increasing, which may have had something to do with the larger than expected declines in the product stocks. Implied gasoline demand increased to 9.452 million bpd from 8.644 million the previous week and 9.148 million a year ago, as dealers loaded up ahead of Memorial Day. But despite the positive EIA report yesterday the product markets closed lower on the day and extended their declines overnight.
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