Crude oil prices suffered their worst single-day decline in over three months on June 25. WTI settled at $70.05/bbl, a 4.3% drop that took prices to their lowest level since mid-February. The move was broad-based, with Brent crude falling 4.9% to $73.31/bbl and RBOB gasoline futures down 5.6%.
The catalyst was a double hit. First, US Energy Information Administration (EIA) data released Wednesday morning showed gasoline demand at 8.8 million barrels per day for the week ending June 20, down 3.2% week-over-week and 4.5% below the same week in 2025. Total motor gasoline supplied — the EIA's proxy for demand — averaged 8.95 million bpd over the past four weeks, the lowest seasonal reading since 2021.
Second, reports emerged that OPEC+ is likely to proceed with its planned production increase of 180,000 barrels per day in July, despite the demand weakness. The group's ministerial meeting is scheduled for June 30-31, and various delegates signaled there is no consensus for a delay. The production increase would bring total OPEC+ output to roughly 900,000 bpd above the level maintained under the December 2024 agreement.
The EIA's weekly petroleum status report also showed a 2.5-million-barrel build in US crude inventories, contrary to analyst expectations of a 1.8-million-barrel draw. Total commercial crude stocks now stand at 469.7 million barrels, 2% above the five-year average for this time of year. The build was concentrated at Cushing, Oklahoma, the WTI delivery point, where inventories rose 800,000 barrels.
US crude oil production held steady at 13.5 million bpd, near the all-time high. The Permian Basin continues to deliver efficiency gains, with the average rig productivity up 8% year-over-year. Horizontal rig counts in the Permian have held above 290 for the past six months, despite oil prices ranging between $70 and $80.
The prompt WTI contract is now trading at a $0.45/bbl discount to the second-month contract, indicating a mild contango structure. When contango widens, it incentivizes storage and discourages immediate physical offtake. The current contango is not extreme — the 6-month spread is $1.10/bbl backwardated — but the move toward contango in the prompt month bears watching.
If you buy crude-linked products, the demand data is the more important signal than the OPEC+ decision. US gasoline demand at 8.8 million bpd entering July — peak driving season — is genuinely weak. Expect refiners to cut runs if inventories continue building. This should feed through to lower diesel, jet fuel, and feedstock prices over the next 2-3 weeks. Consider fixing H2 2026 volumes below $68 if WTI gets there.