OPEC: OPEC has reduced its forecast for oil supply growth from the U.S. and other non-OPEC+ producers in 2025, expecting a rise of 800,000 barrels per day, down from 900,000 bpd previously. This slowdown in supply growth outside OPEC+ could help balance the market, as rapid growth from U.S. shale has pressured prices. Recent decisions by OPEC+ to increase output and U.S. tariffs have further impacted oil prices. OPEC also anticipates a 5% decline in investment in exploration and production outside OPEC+ in 2025, posing challenges despite ongoing efficiency improvements.

Iran: An Iranian official told NBC News on Wednesday that Iran is open to a deal with the U.S. if economic sanctions are lifted. "Expectations of a U.S.-Iran nuclear deal, which could ease recently tightened U.S. sanctions on Iran, triggered fresh selling and potentially loosened the global crude supply-demand balance," said Yuki Takashima, an economist at Nomura Securities. Saudi Arabia's foreign minister, Prince Faisal bin Farhan Al-Saud, expressed full support for the U.S.-Iran nuclear talks and hopes for positive outcomes. The U.S. Treasury Department announced sanctions on Wednesday targeting Iran's efforts to manufacture ballistic missile components domestically, following Tuesday's sanctions on a network of 20 companies involved in sending Iranian oil to China. These sanctions were issued after the fourth round of U.S.-Iran talks in Oman, which aimed to address disputes over Iran's nuclear program.

U.S. Inventories: U.S. crude oil inventories increased by 3.5 million barrels to 441.8 million barrels due to higher oil imports, while gasoline and distillate inventories fell ahead of the summer driving season. Net U.S. crude imports rose by 422,000 barrels per day. Gasoline stocks decreased by 1 million barrels, and distillate stockpiles fell by 3.2 million barrels, the lowest since April 2005. Crude stocks at the Cushing, Oklahoma hub dropped by 1.1 million barrels, and refinery utilization rates increased by 1.2 percentage points.

Market Overview: The energy complex is down sharply this morning due to expectations of a U.S.-Iran nuclear deal that could ease sanctions, and a surprise build in U.S. crude oil inventories raised concerns about oversupply. U.S. President Trump indicated progress in nuclear deal talks with Iran, which could add 0.8 million barrels per day of Iranian crude to the market. Additionally, OPEC+ has been increasing supply, though OPEC reduced its forecast for U.S. and non-OPEC+ supply growth.

Heating Oil (HO)

The above chart shows a daily candlestick chart of heating oil futures from January 2025 to May 2025. Heating oil futures have shown a recovery from their lows earlier this month, with prices currently testing resistance around the $2.2000 level after breaking above both the 14-day and 25-day moving averages. However, this mornings bearish news has heating oil selling off quite significantly. Below the main chart is an RSI (Relative Strength Index) indicator with a value of approximately 53.184, this value indicates that the market is in a neutral position. 

Oil prices fell on Thursday due to expectations of a U.S.-Iran nuclear deal that could ease sanctions and increase global oil supply. President Trump indicated progress in nuclear deal negotiations with Iran, which could unlock 0.8 million barrels per day of Iranian crude. Concurrently, the U.S. imposed new sanctions on Iran, targeting its ballistic missile components and oil network to China. West Texas Intermediate settled at $61.62, down 2.42%. Both diesel and gas also saw some welcomed relief after number of bullish sessions.