Key Takeaways
- US crude oil inventories plunged by 8.26 million barrels, far exceeding the estimated draw of 3 million barrels and sending stockpiles to their lowest levels since 1985.
- President Trump announced the US is "very close" to a trade deal with India and confirmed plans to visit the country following high-level talks with PM Modi at the G7.
- Oil prices extended gains with Brent trading above $80/bbl after data showed a critical inventory low at the Cushing storage hub and a 1.6 million barrel drop in Cushing stocks.
- Intel (INTC) saw its valuation soar, with its price-to-sales ratio jumping from under 2x to over 11x in just one year amid a broader tech rally.
- The CIA has reportedly warned President Trump of skepticism regarding Iran's intentions, even as the President expressed optimism that a nuclear deal will be signed and the Strait of Hormuz will open.
Energy Markets Shaken by Massive Inventory Draw
The U.S. Energy Information Administration (EIA) reported a massive 8.26 million barrel drop in crude oil inventories, significantly higher than the 7.22 million barrel draw in the previous period. This decline has pushed total U.S. crude stocks, including the Strategic Petroleum Reserve (SPR), to their lowest levels since 1985, signaling a tightening global supply.
Oil prices reacted sharply to the news, with Brent crude climbing above $80 per barrel. Markets are particularly concerned about the Cushing storage hub, where inventories fell by 1.6 million barrels, reaching what analysts describe as a "critical low."
Trump Optimistic on Geopolitics and Trade
Speaking from France, President Trump stated that the U.S. is nearing a major trade deal with India. He praised Prime Minister Narendra Modi as a "tough negotiator" and a "great friend," noting that India is currently investing significantly in U.S. factories and infrastructure.
Regarding Iran, Trump claimed that the Iranian leadership "wants to make a deal" and suggested a memorandum of understanding (MOU) is already "pretty detailed." However, CIA Director John Ratcliffe has reportedly expressed skepticism, warning the administration that Tehran may not honor nuclear concessions despite the President's public confidence.
Corporate and Labor Market Shifts
In the technology sector, Intel (INTC) has experienced a dramatic re-rating by investors. The company's price-to-sales ratio has skyrocketed from under 2x to over 11x within a twelve-month period, reflecting massive capital inflows into U.S. semiconductor manufacturing.
Meanwhile, the Financial Times reports a surge in business school applications as a weakening job market pushes recent graduates to delay their careers. Finance-specific Master's programs are seeing a particular influx of students seeking to wait out current economic volatility.
Domestic Policy and Security
President Trump has tied the renewal of the FISA surveillance law to the passage of the Save America Act, insisting on stricter voting regulations before approving national security measures. He also addressed recent maritime tensions, offering condolences for Indian sailors killed in U.S. Navy strikes while emphasizing the need for the Strait of Hormuz to remain open for the global economy.
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.