US-Chinese Trade Talks Progress
June 12, 2025
Energy prices had a strong up day due to optimism about the China and US trade talks. Crude oil and the refined products are all testing their 100- and 200-day moving averages and if they can get a settlement over those levels, it could lead to more fund buying.
The DOE inventory report had crude oil supplies down 3.64 million to a total of 432.415 and last year there were 459.652. Gasoline supplies increased by 1.5 million barrels to a total of 229.807 and last year they were 233.512. Distillates supplies were up 1.25 million, which put total diesel supplies at 108.884 and last year there were 123.366.
US commercial crude oil inventories along the Gulf Caost have depleted to the lowest seasonal level for three years.
Propane supplies had a bigger build than expected at 4.403 million barrels. In the last two weeks stocks have built nearly 11 million barrels, with total stocks now at 65.986 million barrels. Midwest stocks increased by 1.026 million barrels to a total of 14.622 and last year they were 20.137 million barrels. Gulf Coast inventories built by 1.824 million to a total of 42.830 million barrels and last year there were 40.036 million barrels. Builds in propane are normal for this time of year but in the past two weeks stocks have built 11 million barrels per day when the average build has been 6 million barrels per day over the past five years.
Despite the falling rig count US crude oil production stays strong at 13.428 million bpd. Propane production stays strong as well at 2.897 million bpd.
Talk of regional unrest in Baghdad, Kuwait City, and Bahrain late in the afternoon yesterday helped rally prices to new recent highs. The news reported that the US was removing all nonessential staff from its Iraqi embassy. Unrest in the Middle East is never good. The ramifications and spillover impact are always a concern so stay tuned on this news.
The markets are down to start out today most likely on traders taking profits after a big up day yesterday. The current Middle East situation should offer some support to prices here in the near term but for more upside something will have to take place to spur more buying.