West Texas Intermediate crude futures and RBOB gasoline futures finished higher on Wednesday, extending a rebound from recent losses that pushed prices into deeply oversold territory. July WTI crude settled up 0.74 cents per barrel (0.97%), while July RBOB gasoline closed up 0.0291 cents (1.01%), as a mixed batch of U.S. supply data combined with renewed market focus on Middle East shipping risk and refinery outages.
Crude’s advance accelerated after weekly U.S. inventories fell more than expected and after delivery-linked supplies at Cushing declined to an 11-year low, helping offset concerns around potential output growth and the prospect of additional OPEC+ supply. Still, analysts pointed to currency and macro cross-currents: prices pared gains later as the U.S. dollar strengthened.
Key takeaways
- WTI crude and RBOB gasoline rose: July WTI gained 0.97% and July gasoline climbed 1.01% on Wednesday’s settlements.
- Catalyst was supply tightness: The U.S. EIA reported a larger-than-expected crude inventory draw to a 7.5-month low and a sharp fall in Cushing stocks to an 11-year low.
- Geopolitics kept a bid under oil: Developments related to the Strait of Hormuz and Iran risk reinforced fears of tighter global flows.
- Counterforces remain: Signals that U.S. production could keep rising and OPEC+ plans to unwind cuts limit how far oil can rally.
- Market implication: With inventories still below seasonal averages and demand uncertainty elevated, traders appear focused on forward supply disruptions—especially in the Persian Gulf.
What drove the move
Investors credited the early part of Wednesday’s rally to technical positioning. According to the market commentary accompanying Wednesday’s settlement, aggressive losses across the prior three sessions had driven crude deeper into oversold conditions, encouraging some technical buying.
The primary fundamental support came from the U.S. Energy Information Administration’s weekly report. The EIA said crude oil inventories fell by 8.26 million barrels to a 7.5-month low, a larger draw than expectations of a 3.0 million barrel decline. The agency also reported supplies at Cushing—the delivery point for WTI futures—dropped by 1.61 million barrels to an 11-year low.
Gasoline and distillates were less supportive. EIA data showed distillate inventories increased by 951,000 barrels versus expectations for a 500,000 barrel draw. Even so, U.S. stock levels across categories remained below seasonal norms, with crude inventories 6.1% under the seasonal 5-year average as of June 12, gasoline 6.4% lower, and distillates 12.9% below the seasonal 5-year benchmark.
Market reaction and competing signals
While the crude inventory figures helped lift WTI, the broader oil complex continued to reflect a tug-of-war between tight near-term supply signals and longer-run production expectations. The EIA reported U.S. crude production in the week ending June 12 edged up 0.1% week over week to 13.806 million barrels per day, modestly below the prior record-high of 13.862 million barrels per day (week of November 7). Separately, Baker Hughes said the number of active U.S. oil rigs rose by 2 to 433 for the week ended June 12, according to its latest reporting—still well below the 627 rigs peak seen in December 2022.
On the policy and geopolitics front, uncertainty around Iran-linked flows remained a key driver. The article cited remarks by President Trump that the Strait of Hormuz would reopen after this Friday’s signing of a peace deal in Switzerland, which would initiate 60 days of talks on Iran’s nuclear program. However, the same account noted that if no nuclear agreement is reached, the U.S. could restart military attacks—an element that can quickly alter expectations for shipping availability and crude supply.
The International Energy Agency warned that the impact on global oil demand from a war involving Iran could be deeper than previously forecast. According to the IEA’s Wednesday warning, world oil consumption could fall by 1.1 million barrels per day this year, compared with an earlier estimate of 420,000 barrels per day.
Supply risk, OPEC plans, and currency effects
Several supply-side factors supported higher crude pricing even as traders weighed output forecasts. According to EA Analytics, Russian crude-processing rates averaged 4.32 million barrels per day in the first 10 days of June, the lowest in 20 years, attributed to damage to Russian energy infrastructure from drone and missile attacks. The article also referenced reporting by Bloomberg that Ukrainian forces struck three Russian fuel-producing facilities during the month, following 17 attacks in May, and noted that U.S. and EU sanctions on Russian oil companies, infrastructure, and tankers have further constrained exports.
At the same time, OPEC+ dynamics introduced a ceiling on the rally. The report said that in mid-May, OPEC delegates indicated the cartel aims to continue a sequence of quota increases designed to complete the return of halted oil production by the end of September. It further noted that OPEC’s May crude production fell by 3.36 million barrels per day to a 40-year low of 16.33 million barrels per day, while earlier OPEC+ decisions to raise output are complicated by ongoing Middle East disruptions.
Currency also played a role. The article stated that crude trimmed gains from its best levels as the U.S. dollar strengthened—an ongoing headwind for dollar-denominated commodities.
What to watch next
Traders are likely to remain focused on weekly supply signals and on developments that affect Middle East shipping risk and production capacity. The next move in crude may depend on follow-through in U.S. inventory trends, any updates on the pace of Iran-related talks and potential re-routing of oil flows through the Strait of Hormuz, and further commentary on U.S. output growth expectations.
