Record-high Iraqi oil exports in June

Oil prices closed virtually unchanged yesterday after a highly volatile day of trading. Brent initially climbed to $65.5 per barrel, then slumped to $62.6 but recovered to just shy of $64 per barrel again in the evening. 

This morning, yesterday's trading pattern seems to be repeated. Yesterday morning's price surge was due to rising gasoline crack spreads in Europe - they reached $25 per barrel, their highest level in more than eight years. This is regarded as a sign of robust demand for European gasoline both in Europe and for export. 

The fact that the US Department of Energy yesterday afternoon reported a surprising 460,000 barrel increase in US gasoline stocks then weighed all the more heavily. This overshadowed the seventh consecutive weekly decline in crude oil stocks that was announced at the same time, which at 2.7 million barrels was even more pronounced than had been envisaged in advance, notes Commerzbank.

One positive aspect worth mentioning, is the fact that US crude oil production decreased slightly last week, though it remains at a very high level at just shy of 9.6 million barrels per day. There also still seems little chance of crude oil being in short supply: according to loading data, Iraq could export a record 3.2 million barrels of crude oil per day in June. The plentiful supply is likely to preclude any increase in prices, states Commerzbank.