WTI Settles at $90.54 as China Crude Imports Hit 10-Year Low and US Stocks Draw 8 Million Barrels

WTI crude settled at $90.54 per barrel on Friday's CME close, the July 2026 front-month contract, down $2.50 or 2.69 percent on the session. Brent crude settled at $93.09 per barrel on the ICE August front-month contract, down $1.94 or 2.04 percent. Both benchmarks have retreated from the $126 per barrel peak recorded by Brent in March 2026, when the Strait of Hormuz first closed following US and Israeli military strikes on Iran.

Friday's declines reflect two demand-side signals weighing against what remains a tight global supply picture. Chinese crude oil imports fell to their lowest level in ten years in May 2026, as reduced refinery utilization and softer domestic demand cut purchases from the world's largest crude importer. US commercial crude inventories drew by 8.0 million barrels in the week ending May 29, according to the most recent EIA Weekly Petroleum Status Report. That draw left commercial stockpiles at 433.7 million barrels, 3 percent below the five-year seasonal average.

The OPEC+ Hike Falls Far Short of Replacing Hormuz Volumes

OPEC+ raised its June production quota by 188,000 barrels per day in May, the cartel's first meeting since the United Arab Emirates departed OPEC on May 1, 2026. Saudi Arabia, Russia, and five other members approved the increase, which analysts had widely anticipated. The increase mirrors the cadence of 206,000-barrel monthly hikes the group approved in both March and April, minus the UAE's share of those prior increments.

The math shows why the hike provides modest price support. Goldman Sachs estimated that Persian Gulf crude output has fallen approximately 14.5 million barrels per day, or 57 percent, from pre-conflict levels. The 188,000 barrel-per-day increase represents 1.3 percent of that lost volume. EIA's May 2026 Short-Term Energy Outlook found that global oil inventories drew by an average of 8.5 million barrels per day in the second quarter of 2026. Relative to that daily deficit, the OPEC+ hike covers approximately 2.2 percent of the shortfall.

Forecasters Split on the Price Path Ahead

The EIA Short-Term Energy Outlook published May 12, 2026 projected Brent crude averaging $106 per barrel in May and June 2026. That Q2 estimate is already below the EIA's own April forecast of a $114.60 per barrel Q2 peak, suggesting that some supply found alternative routing through Red Sea and pipeline corridors during the Hormuz closure. Wood Mackenzie projects a drop to approximately $80 per barrel if a US-Iran diplomatic resolution is reached by late June 2026.

Goldman Sachs has characterized $100 per barrel as a floor for Brent rather than a ceiling, citing the scale of the supply disruption. The EIA expects Brent to average $89 per barrel in the fourth quarter of 2026 and $79 per barrel across 2027, as Middle East production gradually returns. The gap between Goldman's near-term floor and Wood Mackenzie's resolution scenario shows the wide range of outcomes tied to diplomatic progress in the Hormuz negotiations.

Prices Below EIA Forecasts Point to Demand Revision Risk

With Brent at $93.09 on Friday and WTI at $90.54, both benchmarks are trading below the EIA's May 2026 Q2 central estimate of $106 per barrel for Brent. When Oil Authority reported EIA's April forecast on April 17, the agency set a $96 per barrel full-year Brent average and a Q2 peak near $114.60 per barrel. Markets are pricing below both the April and May EIA central cases, which may reflect China demand weakness being weighted more heavily than official models assumed.

The WCS-WTI differential stood at $16.30 per barrel on June delivery at Hardisty, Alberta, wider than the Alberta Energy Regulator's base-case forecast of $12 per barrel for 2026, according to brokerage CalRock data from May 1. Alberta crude exports face the same Hormuz-era tanker rerouting that is shaping global crude freight markets. Any reopening of the strait could narrow the differential further as tanker availability and freight rates normalize.