Key Takeaways
- US distillate fuel oil inventories plummeted in May to their lowest levels since June 2020, driven by sustained global supply pressures and the ongoing closure of the Strait of Hormuz.
- Total US supply of crude oil and petroleum fell to its lowest point since March 2025, as the Energy Information Administration (EIA) reports a sharp contraction in commercial stockpiles.
- Geopolitical tensions surged as Iranian missiles reportedly struck a facility in Kuwait, killing one worker and causing extensive damage, marking a dangerous expansion of the regional conflict.
- In UK politics, a new poll for The i Paper shows Labour, under new Prime Minister Andy Burnham, opening a 5-point lead over Reform UK, the party's largest lead since early 2025.
US Energy Inventories Hit Critical Thresholds
The U.S. Energy Information Administration (EIA) has released data confirming a significant tightening in domestic energy markets. Distillate fuel oil supply in the US dropped in May to its lowest level since June 2020, a period marked by the initial global pandemic recovery. This contraction comes as refineries struggle to keep pace with demand while global trade routes remain severely disrupted.
Simultaneously, the total US supply of crude oil and petroleum dropped in May to its lowest level since March 2025. Market analysts note that commercial crude inventories (excluding the Strategic Petroleum Reserve) fell by 7.2 million barrels in the most recent reporting week, reaching a 52-week low. The Strategic Petroleum Reserve (SPR) also continues its multi-year drawdown, currently holding approximately 307.6 million barrels, the lowest level since 1983.
Conflict Escalates with Strikes in Kuwait
Regional stability in the Middle East deteriorated further on July 31, 2026, following reports of explosions in Kuwait. Iranian state media (IRIB) and Kuwait’s Defense Ministry confirmed that an Iranian missile strike targeted a building belonging to a Chinese company in northern Kuwait. The attack resulted in one fatality and significant structural damage, signaling that the conflict is spreading beyond its initial borders.
This escalation follows a "heavy wave" of retaliatory strikes by the U.S. Central Command (CENTCOM) against Islamic Revolutionary Guard Corps (IRGC) facilities in Iran. The ongoing closure of the Strait of Hormuz—which typically handles nearly 20% of global oil flows—continues to choke international supply. Despite these tensions, ICE Brent futures recently settled 1.9% lower, moving back below $90 per barrel as traders weigh geopolitical risks against signs of improving flows through alternative pipeline routes.
"Burnham Bounce" Reshapes UK Political Landscape
In the United Kingdom, the political landscape is undergoing a rapid shift following the ascension of Andy Burnham to Prime Minister. A fresh voting intention poll conducted by BMG Research for @theipaper shows Labour surging to 28% (+5), opening a 5-point lead over Reform UK, which fell to 23% (-4). This represents the first time Labour has led Reform UK in a major poll since March 2025.
The "Burnham bounce" has also impacted other parties, with the Conservatives holding steady at 20%, while the Liberal Democrats and Greens both sit at 10%. Analysts suggest that Burnham's focus on the cost-of-living crisis and regional devolution has successfully "brought the left home," potentially putting Labour on the brink of a parliamentary majority if these numbers are replicated in a general election.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.