Written Commentary
Ag Market View for July 8.25
July 8, 2025
CRUDE OIL
July Crude Oil is slightly lower this morning but is inside the range of the past three weeks. OPEC+ meets this week, and they are expected to increase their production target for July another 411,000 barrels per day, as they did for May and June. The Baker Hughes rig count showed US oil rigs in operation down 8 rigs to 465 last week. This was down from 497 rigs a year ago and above the five-year average of 447. It is also the lowest since November, 2021. The Iranian President said yesterday that Iran would be able to survive if the negotiations with the US collapse. The possibility on an agreement had been viewed as bearish for crude oil on ideas that it could open up Iranian crude oil to the global market, so the apparent breakdown of the talks offers some support to oil. Friday’s Commitments of Traders Report showed managed money traders were net sellers of 10,422 contracts of crude oil for the week ending May 20, reducing their net long to 128,866.
NATURAL GAS
July Natural Gas is higher this morning as a gradual warmup in the eastern half of the US that suggests seasonal cooling demand may finally start to pick up. The Baker Hughes rig count showed US natural gas rigs in operation were down 2 rigs to 98 last week, down from 99 a year ago and below the five-year average of 113. Total rigs in operation were down 10 to 566 last week, the lowest since November 19, 2021, mainly due to the drop in oil rigs. This has negative implications for natural gas production as well. Financial firm LSEG said on Friday that average gas output in the Lower 48 US states fell to 104.9 billion cubic feet per day in May, down from a record high of 105.8 bcfd in April, reportedly due to maintenance. The average amount of gas flowing to the eight big LNG export plants operating in the US fell to 15.1 bcfd in May, down from a monthly record of 16.0 bcfd in April, again due to maintenance, as facilities took advantage of the seasonally slow period. Looking ahead, energy traders told Reuters that they expect LNG feedgas to remain below April’s record in June with more slowdowns for maintenance expected. Friday’s Commitments of Traders Report showed managed money traders were net sellers of 18,158 contracts of natural gas for the week ending May 20, increasing their net short to 56,807.
PRODUCTS
Friday’s Commitments of Traders Report showed managed money traders were net buyers of 2,076 contracts of RBOB for the week ending May 20, increasing their net long to 41,363. For ULSD, managed money traders were net buyers of 19,848 contracts, which took them from a net short position to a net long of 2,697. We should be moving into the high driving season in the US, but the gasoline market is not impressed. Last week’s EIA data showed US implied gasoline consumption for the week ending May 16 was the lowest for the period since Covid.
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