WTI crude suffered its largest single-day decline in two weeks as macroeconomic forces overwhelmed relatively constructive fundamental data. The US dollar rallied 1.1% after stronger-than-expected jobs data, making dollar-denominated oil more expensive for non-US buyers and triggering broad commodity liquidation.
The demand-side picture weakened on multiple fronts. The US ISM Manufacturing PMI fell to 48.7 (contraction), while the Chinese Caixin PMI slipped to 50.1, barely in expansion territory. Germany's industrial production dropped 1.8% month-on-month, adding to European demand concerns. Total OECD oil demand is now tracking 0.4% below Q2 2025 levels.
On the supply side, OPEC+ compliance remained at 87% in May, with Iraq and Kazakhstan still producing above their quotas. However, Saudi Arabia's production fell by 50,000 bpd to 8.95 million bpd, a sign of continued commitment to market balance. The next OPEC+ meeting is scheduled for July 2.
US crude inventories fell by 1.2 million barrels last week to 455.2 million barrels, against expectations of a 500,000 barrel build. Refinery utilization rose to 93.4%, suggesting strong downstream demand. Gasoline stocks fell 2.1 million barrels, supporting the narrative of robust summer driving demand.
WTI at $90 is approaching the lower end of the $88-96 range that has held since mid-May. The $88 level is the 200-day MA and a critical support. If it holds, $90 is a good entry point for Q3 coverage (10-15% of volume). If $88 breaks, the next support is $84 (February lows).