Crude Oil Rallies on Strong GDP and Global Tensions

Crude Oil Extends Gains on Strong Economic Data and Geopolitical Moves

September WTI crude oil (CLU25) rose by +0.56 (+0.81%) today, while September RBOB gasoline (RBU25) gained +0.0183 (+0.84%), pushing both markets to fresh five-week highs. Crude and gasoline continued to rally this week as strong global economic data boosted demand outlooks.

U.S. Q2 GDP climbed +3.0% (q/q annualized), topping expectations of +2.6%, and July ADP employment increased by +104,000—the strongest reading in four months. In the Eurozone, Q2 GDP rose +0.1% q/q and +1.4% y/y, beating expectations, while July economic confidence hit a five-month high at 95.8.

President Trump also fueled bullish sentiment by warning India about its continued Russian oil imports and setting a new 10-day deadline for Russia to reach a truce with Ukraine or face increased sanctions. JPMorgan warned that enforcing sanctions could trigger a supply shock, especially with limited OPEC spare capacity.

Geopolitical Pressure Mounts

The European Union expanded sanctions against Russia, blacklisting 105 more shadow fleet ships and cutting off 20 Russian banks from SWIFT. The measures also included restrictions on Russian-refined oil processed through third countries, and sanctions on a Rosneft-linked refinery in India.

OPEC+ Faces Production Crossroads

OPEC+ may pause production hikes starting in October due to rising inventory concerns. The group plans to increase output by +548,000 bpd in September but could scale back later. The International Energy Agency warned that inventories are rising by 1 million bpd, with a potential Q4-2025 surplus equivalent to 1.5% of global demand.

Despite these concerns, OPEC+ raised output by 548,000 bpd on August 1 and could continue increasing to pressure non-compliant members. June production rose by 360,000 bpd to 28.10 million bpd, a 1.5-year high.

Iraq, Tanker Stocks Add to Bearish Risks

Iraq may soon resume exports through the Iraq-Turkey pipeline from the Kurdish region, potentially adding +230,000 bpd to the market. Additionally, Vortexa reported a +23% weekly increase in crude held on stationary tankers, totaling 84.99 million barrels as of July 25—another bearish factor for prices.

Mixed EIA Data Adds Volatility

Today’s EIA report delivered a mixed picture:

• Crude inventories rose +7.7 million bbl (vs. expected -2.6 million bbl)
• Gasoline stocks fell -2.7 million bbl (vs. expected -1.1 million bbl)
• Distillate inventories rose +3.6 million bbl (vs. expected -400k bbl)
• Cushing stocks increased +690,000 bbl

Despite the headline crude build, inventories remain historically tight. U.S. crude supplies are 5.6% below the five-year seasonal average, gasoline is 0.7% below, and distillates are 15.2% below. U.S. crude production rose +0.3% w/w to 13.314 million bpd—just shy of the record set in December 2024.