Since the crude oil price peaked near $130/barrel in March 2022 – shortly after the Russian invasion of Ukraine – crude oil futures prices have been trending lower. Prices are currently half of what they were at that peak about three years ago.
What’s happened
Nearby July 2025 crude oil futures prices have been consolidating to $60 and $64/ barrel over the past three weeks. Fundamental news at the moment seems to lean an equal mix of bullish and bearish. This balanced fundamental outlook is keeping crude oil prices seemingly content to trade in this lackluster pattern – at least for now.
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From a marketing perspective
Two pieces of news supported the market:
- This week’s energy report from the U.S. Energy Information Administration showed stocks of U.S. crude oil supplies fell a whopping 4.3 million barrels from last week. That was much more than the drop that was expected, which was 1 million barrels.
- Impact of the Canadian wildfires. Global production is potentially going to be lower due to the Canadian wildfires because production had to be reduced or shut down to evacuate workers, with lost crude oil production possibly near 250,000 barrels per day.
Potentially impacting prices on the negative side are continued ideas that U.S. and global economic growth may be trending lower, which could reduce demand for crude oil.
Prepare yourself
With prices fundamentally balanced at the moment, further sideways trade for crude oil futures could continue.
However, plenty of geo-political risks could cause the market to break out of this consolidation pattern, namely looking at any sort of announcement between the U.S. and Iran reaching a nuclear deal. Trade also needs to monitor Russia and Ukraine, as the war continues to flare up, with no real end in sight.
For farmers, energy prices are important not only to monitor from the standpoint of fuel for farm equipment, but also in terms of how crude oil, ethanol and corn prices tie together.
A rally in crude oil could support ethanol prices, which would likely support corn prices. But the same is true should crude oil prices continue to edge lower, lending to lower ethanol prices and lower corn prices, potentially.
Reach Naomi Blohm at 800-334-9779, on X: @naomiblohm, and at naomi@totalfarmmarketing.com.
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