Oil News: Sluggish Gasoline Demand Undermines Bullish Crude Inventory Data

Crude Oil News Today: Supply-Demand Mismatch Pressures Crude Rally

Light crude futures edged higher Thursday, but recent momentum is fading as the market runs into technical resistance and demand concerns mount. Prices remain above the 50-day moving average at $62.10, a level that initially sparked buying earlier this week.

However, the rally stalled at $63.96—just shy of key resistance at $64.19 and $64.40. A breakout above those levels could open the path toward the 200-day moving average at $66.51. Without follow-through, the market risks drifting into a lower pivot range between $62.59 and $59.51.

At 09:10 GMT, Light Crude Oil Futures are trading $63.07, up $0.22 or +0.35%.

Saudi Price Cuts and OPEC+ Supply Moves Weigh on Sentiment

Crude came under pressure midweek after Saudi Arabia reduced its July selling prices to Asia to the lowest in nearly two months. While the cuts were milder than expected, they reflect soft demand in a region typically driving summer buying strength.

The timing follows OPEC+’s decision to raise July output by 411,000 barrels per day, signaling that major producers are prioritizing market share even as demand signals waver. This coordinated action from Saudi Arabia and Russia is seen as an attempt to discipline over-producers and tighten control of global supply dynamics.

Refiners Drive Crude Draw, But Fuel Demand Falls Short

Weekly EIA data delivered a mixed message. U.S. crude stocks dropped by 4.3 million barrels to 436.1 million, outpacing expectations and driven by a strong increase in refinery runs. Utilization rose to 93.4%, suggesting refiners are preparing for peak seasonal demand.

Yet product supplied of gasoline, a reliable demand indicator, unexpectedly fell by 1.2 million barrels per day to 8.3 million—raising red flags. This disconnect between refinery activity and end-user demand triggered large builds in gasoline (+5.2 million barrels) and distillate inventories (+4.2 million barrels), undermining the bullish signal from the crude draw.

U.S. Demand Underperforms Despite Summer Driving Season

Despite the post-holiday kickoff to the U.S. driving season, demand remains sluggish. The gasoline supply drop came at a time when consumption typically rises.

This underperformance contributed to a flat intraday price reaction, with U.S. crude last quoted near $63.07. Analysts point to the possibility that refiners overestimated near-term demand, which may keep inventories elevated in the short run.

Outlook: Bearish Bias Until Demand Aligns with Supply

The market is caught between tightening crude supplies and underwhelming fuel consumption. Without a recovery in gasoline demand to match refinery output, the risk of oversupply in refined products remains high.

Unless price action breaks above $64.40 on strong volume and demand metrics improve, crude futures face a bearish outlook near term.

More Information in our Economic Calendar.