Written Commentary
Ag Market View for July 8.25
July 8, 2025
CRUDE OIL
With the OPEC+ meeting Saturday and expectations for another 411,000 barrel per day increase in output for July, upside potential for crude oil would seem to have its limits. The market did find support today on news that the US has barred Chevron from exporting crude from Venezuela. This was not really a surprise, it had been talked about in the press for some time. The Trump administration did allow Chevron to keep assets in Venezuela, including its stakes in oil joint ventures with the state oil company. President Trump raised the possibility of imposing more sanctions on Russia in response their latest attacks on Ukraine. A wildfire in Alberta, Canada has prompted a temporary shutdown of some oil and gas production there of roughly 4,000 barrels per day, and the fire has yet to be contained. Iran’s nuclear chief said today that they might allow the UN nuclear watchdog to send US inspectors to Iranian nuclear sites the talks with Washington succeed.
NATURAL GAS
July Natural Gas is higher this morning and is approaching the May 21 high of 3.840. A warmer trend this week, starting out in the western US and gradually moving eastward, could boost cooling demand somewhat, but a cooler trend is expected to emerge in the west as the week progresses. The 6-10 forecasts call for above normal temps in from the US Plains to the east coast and below normal from the Rockies to the west coast. For the inventory report this week, the early Reuters poll has trade expectations calling for US natural gas storage to show a net injection of 88 to 100 bcf last week. The five-year average change for the week is +100 bcf, so if this week’s number comes within the expected range, this would be the first time since April 11 and only the second time since May 7 that the net change on the week was not larger than the average.
PRODUCTS
July RBOB and ULSD are higher this morning, but they may be limited by the prospect of another boost in OPEC+ crude oil production. The trade is looking for a slight increase of 100,000 barrels in gasoline stocks and 900,000 for distillates. Recall that 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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