September WTI crude oil (CLU25) today is down -0.93 (-1.40%), and September RBOB gasoline (RBU25) is down -0.0088 (-0.42%).
Crude oil and gasoline prices are under pressure today, with crude falling to a 1-week low. Concerns about weakening energy demand are weighing on crude prices after the US Jul ISM services index unexpectedly declined. Crude prices also have a negative carryover from Sunday when OPEC+ raised its crude production levels, stoking fears of a global supply glut.
Weakness in global economic news is bearish for energy demand and crude prices. The US Jul ISM services index unexpectedly fell -0.7 to 50.1, weaker than expectations of an increase to 51.5. Also, the Eurozone Jul S&P composite PMI was revised downward by -0.1 to 50.9 from the previously reported 51.0.
Concerns about a global oil supply glut are weighing on crude prices after OPEC+ on Sunday endorsed an additional 547,000 bpd increase in its crude production for September 1. OPEC+ is boosting output to reverse the 2-year-long production cut, gradually restoring a total of 2.2 million bpd of production by September 2026. After Sunday’s meeting, the group said it will closely monitor demand and may maintain production levels, restart halted supplies, or reverse recent production increases. OPEC+ has 1.66 million bpd of supplies that are currently due to remain offline until late 2026. The International Energy Agency said inventories have been accumulating at a rate of 1 million bpd and that the global crude oil market faces a surplus by Q4-2025 equivalent to 1.5% of global crude consumption. OPEC July crude production fell -20,000 bpd to 28.31 million bpd.
Crude prices have support after President Trump said last Monday that he would impose new tariffs on countries buying Russian energy unless Russia reaches a ceasefire with Ukraine by this Friday. JPMorgan Chase warned that if enforced, oil markets would be unable to ignore the impact of triple-digit tariffs on Russian oil, given the significant scale of Russian exports and limited OPEC spare capacity, which could potentially lead to a supply shock.
The European Union recently approved fresh sanctions on Russian oil due to its aggression against Ukraine. The sanctions package includes cutting off 20 more Russian banks from the international payments system SWIFT, as well as restrictions imposed on Russian petroleum refined in other countries. A large oil refinery in India, part-owned by Russia’s Rosneft PJSC, was also blacklisted. Additionally, 105 more ships in Russia’s shadow fleet were sanctioned, pushing the number of sanctioned ships above 400.