Oil, fundamental analysis
Despite some bullish signals this week, the expectation that the OPEC+ group will increase output again in July dominated the crude market during the holiday-shortened trade week. A drop in US GDP for the first time in 3 years also overrode some otherwise positive economic news. Even an across-the-board drop in crude and refined product stocks failed to boost the market. WTI’s High for the week was Thursday’s $63.05/bbl while the Low was Friday’s $59.75. Brent North Sea crude had a High of $66.15 on Thursday and a Low of $61.45 on Monday. Both grades are lower week-on-week while the Brent/WTI spread has widened to ($3.70).
Geopolitical risks played a support role this week as President Trump considers stiffer sanctions on Russia for continued attacks on Ukraine and as Israeli Prime Minister Netanyahu threatens an attack on Iran’s nuclear facilities despite the on-going US/Iran talks. A short-lived bump in oil prices occurred when the US Court of International Trade declared Trump’s “Liberation Day” tariffs to be illegal. Additionally, the US has authorized Chevron to keep its assets in Venezuela but not to export any of its crude. However, the pending OPEC+ meeting overshadowed any bullish sentiment.
OPEC+ plans to make another output increase of 411,000 b/d in July. There is speculation that the group may go with a higher production level given that Kazakhstan has been over-producing for months now. The potential lower prices would punish Kazakhstan while also taking market share from US shale oil producers. The consortium will meet this weekend.
India is surpassing China in terms of oil demand but their growth rate is not expected to match that of China’s past trajectory. The US Energy Information Administration (EIA) is projecting a slowdown in global oil demand for this year and next. Traditionally, consumption has averaged a 1.2 million b/d increase each year, but the agency foresees a 1.0 million b/d growth rate going forward. Part of the assessment has to do with the International Energy Agency (EIA) projecting a lower global GDP growth of 2.8% coupled with the on-going trade war uncertainties.
The EIA's Weekly Petroleum Status Report indicated that commercial crude oil inventories for last week decreased 2.8 million bbl while the SPR increased slightly. Gasoline demand increased ahead of the Memorial Day weekend while oil production held at 13.4 million b/d.
US first-quarter 2025 GDP shrunk by 0.2%, reversing the 2.4% gain in fourth-quarter 2024. It was the first negative reading in 3 years. The PCE Index, the US Federal Reserve’s preferred measure of inflation, increased only 0.1% in April while the CPI was flat. Personal spending rose a modest 0.2% last month, in line with expectations, while savings increased. Consumer sentiment this month has risen from 50.8 to 52.2 as the delay in the new tariff rates on Chinese imports has lessened the perceptions of economic disruption. The Dow is down on the week but up month-on-month while both the S&P and NASDAQ are up on the week and month-on-month. The USD is up slightly for the week on the temporary halt in tariffs on imports which may also be holding oil prices down.
Oil, technical analysis
July NYMEX WTI Futures are hovering around the 8- and 13- and 20-day Moving Averages this week with the consolidation pattern continuing. Volume is about average at 260,000. The Relative Strength Indicator (RSI), a momentum indicator, is neutral at 45. Resistance is now pegged at the critical $61.75 mark (Friday’s High) with near-term Support at $59.75 (the week’s Low).
Looking ahead
Concerns over increased supply ultimately won out over several positive demand indicators this week and that sentiment may last unless new sanctions are imposed on Russia, or the US administration is successful in challenging the court ruling on the illegality of the Trump import tariffs.
Gasoline demand was higher last week, which only encompassed the pre-Memorial Day weekend period. Next Wednesday’s Weekly Petroleum Status Report will show whether or not summer got a strong jump start for gasoline, diesel and jet fuel consumption over the holiday weekend.
Natural gas, fundamental analysis
A fifth-straight triple-digit storage injection, coupled with on-going mild weather, had July NYMEX natural gas futures trading lower than the prior week. Production was also higher last week. The week’s High of $3.83/MMbtu occurred Wednesday with the week’s Low of $3.44 hit Thursday and Friday. Supply last week was +0.7 bcfd to 112.5 bcfd vs. 111.8 the prior week.
Demand was -0.8 bcfd to 97.3 bcfd vs. 98.1 bcfd the week prior, with the biggest gains in power and residential consumption. Exports to Mexico were 7.2 bcfd vs. 7.6 the prior week. LNG exports were 15.7 bcfd vs. 15.6 bcfd the prior week. European gas prices were most recently higher at $10.35/MMbtu as hopes for the return of Russian supplies dwindles and as Germany opposes the restarting of the Nord Stream pipelines. Additionally, demand for LNG cargoes has increased in the Middle East ahead of the summer heat. The EIA’s Weekly Natural Gas Storage Report indicated an injection of 101 bcf, above the forecasted +99 bcf and a 5-year average of +98 bcf.
Total gas in storage is now 2.476 tcf, rising to 11.3% below last year holding at 3.9% above the 5-year average.
July 2025 NYMEX Henry Hub Natural Gas futures have fallen below the 8-, 13- and 20-day Moving Averages this week and breached the Lower-Bollinger Band limit at one point. Thursday and Friday’s Lows constitute a “double-bottom” which is consecutive days where the market tried but failed to go lower. While not as strong an indicator as a “triple-bottom,” this signal could lead to technical buying. Volume was 95,000 and lower than the recent average. The RSI is slightly oversold at 40. Support is pegged at $3.44 (double-bottom) with Resistance at $3.65 (8-day MA).
Looking ahead
Demand for US power generation looks weak over the next 2 weeks except for areas in the deep southeast, so storage refills should continue to grow. While there is a storage deficit compared to year-ago levels, volumes are comfortably above the 5-year average. Until A/C load kicks-in, look for large storage injections to continue. We may see some increased LNG exports as a result of the growing global demand.

Tom Seng
Dr. Tom Seng is an Assistant Professor of Professional Practice in Energy at the Ralph Lowe Energy Institute, Neeley School of Business, Texas Christian University, in Fort Worth, Tex.