From Yahoo Finance: 2025-06-18 11:52:00

Crude oil prices fell today after President Trump hinted at the possibility of negotiating with Iran, leading to hopes of de-escalation in the conflict with Israel. Despite a weaker dollar and a positive weekly EIA report, prices declined due to easing tensions between the countries.

President Trump’s call for Iran’s surrender initially caused oil prices to rise, with speculation that the US may join Israel’s attacks on Iran. However, Iran’s refusal to surrender and continued movement of ships through the Strait of Hormuz have contributed to ongoing volatility in oil markets.

Concerns over a global oil glut persist as OPEC+ plans to gradually increase crude production to reduce prices. Saudi Arabia is expected to lead further production hikes, aiming to punish overproducing members and stabilize the market. This strategy may lead to a reduction in oil prices in the long term.

The latest weekly EIA report showed a significant drawdown in crude inventories, exceeding expectations. Gasoline supplies saw a smaller build than anticipated, while distillate stockpiles remained below expectations. Additionally, Cushing crude supplies decreased, indicating a positive trend in the oil market.

US crude oil inventories are currently below the seasonal 5-year average, signaling a potential tightening of supply. Gasoline and distillate inventories also remain below average, contributing to a positive outlook for the oil market. However, US crude oil production remains steady, slightly below record highs.

Active US oil rigs fell to a 3-3/4 year low, indicating a decline in drilling activity. The number of rigs has significantly decreased in recent years, reflecting market conditions and industry trends. This shift may impact future oil production and supply levels.

Read more: Crude Prices Fall on Hopes the Israel-Iran Conflict Will De-Escalate