Yesterday’s EIA data for the week to 29 June, released a day later than usual due to the Independence Day holiday, was fairly supportive, we believe. For the first time YTD, implied all product demand was greater than the prior five-year average, having risen 0.5mmb/d (+2.8%) WoW after gains across all product categories. The weakness in YTD average all product demand eased slightly from -3.3% to -3.1% YoY. Meanwhile, gasoline prices slid further, dropping below USD 3.40/US gallon. This and the Independence Day holiday could provide further support for next week’s demand numbers. Crude inventory fell more than expected, down 4.3mmbbl WoW, almost double the 2.3mmbbl fall the market was looking for. However, the WoW fall in inventory appears due mainly to a 0.2mmb/d fall in domestic production and a 0.3mmb/d fall in crude imports, probably as a result of Tropical Storm Debby. The oil price has risen nearly USD 10/bbl since last week, which we believe is mainly attributable to renewed sabre rattling by Iran, most likely in response to the formal imposition of the new US sanctions and EU embargo. We do not expect these actions to have a significant incremental impact on physical supplies and believe the market is probably still oversupplied, leaving the price risk ultimately to the downside, should that continue. OPEC production figures for June will become more widely available next week, but are unlikely to show much, if any, decrease from May, we expect. The US EIA data recorded a 4.3mmbbl fall in crude inventory (vs. -2.3mmbbl
expected), a 1.1mmbbl fall in distillate (vs. +1.0mmbbl expected) and a 0.2mmbbl gain in gasoline (vs. +1.0mmbbl expected).