WTI holds $69.64 support as crude inventories near minimum levels

WTI crude held support at $69.64 a barrel on Tuesday while Brent defended $73.06, as near-minimum U.S. crude inventories offset the fastest recovery in Persian Gulf exports since before the Iran war began in February.

"The inventory floor is providing a near-term bid, but the supply overhang from the Strait of Hormuz reopening is the dominant force," said Omar Tariq, energy analyst at Edgen.

U.S. crude inventories remain near minimum operating levels, with the Energy Department raising its 2026 production estimate to 13.72 million barrels per day from 13.65 million. On the supply side, tanker traffic through the Strait of Hormuz has accelerated to at least 75 percent of pre-war levels, with 13 million barrels leaving the Persian Gulf in the three days through Wednesday, according to Bloomberg calculations. Saudi Arabian tankers are heading to the Ras Tanura terminal, signaling the kingdom's first exports from within the Gulf since March.

The tug-of-war between tightening U.S. supply and swelling Middle East flows sets up a binary scenario for crude: if inventories draw further into minimum territory, WTI could hold $69.64 and attempt a recovery toward $72. But if Persian Gulf exports return to pre-war levels by end-July as Goldman Sachs projects — one month earlier than previously expected — Brent could break below $73 and test $70.

Supply Recovery Outpaces Demand Concerns

The supply-side shift has been dramatic. US Energy Secretary Chris Wright said flows through the Strait of Hormuz were close to pre-war levels, with at least 20 million barrels having exited the waterway in the past 24 hours. Oman opened temporary routes to ease tanker departures, while Iran's Revolutionary Guards warned vessels against crossing without authorization.

The International Energy Agency warned last week that the Iran war's impact on global oil demand will be deeper than previously anticipated, forecasting world oil consumption will decline by 1.1 million barrels per day this year — a steeper drop than its earlier estimate of 420,000 barrels per day. Goldman Sachs cut its Brent crude price forecast to $80 a barrel in the fourth quarter, down from $90, citing the faster-than-expected return of Persian Gulf supply.

On the bearish side for supply, Ukrainian drone attacks on Russian oil infrastructure continue to curb output. Russian crude-processing rates averaged 4.32 million barrels per day in the first 10 days of June, the lowest in 20 years, according to EA Analytics. Ukrainian forces struck three Russian fuel-producing facilities this month following a record 17 attacks in May.

Natural Gas Diverges With Upward Channel

Natural Gas traded at $3.220, maintaining an upward channel that contrasts with crude's defensive posture. The divergence reflects different supply-demand dynamics, with gas markets less exposed to the Strait of Hormuz reopening and more influenced by seasonal cooling demand and domestic production trends.

The 10-year Treasury note yield slipped two basis points to 4.49 percent as inflation concerns eased alongside falling crude prices. Markets now price a 63.7 percent probability of no rate change at the Federal Reserve's July meeting, with a 36.3 percent chance of a 25-basis-point hike.

This article is for informational purposes only and does not constitute investment advice.