August NYMEX West Texas Intermediate crude dropped $1.25 to $68.30 per barrel by midday, while September ICE Brent futures fell $1.60 to $71.35. The narrowing price differential between WTI and Brent, which shrank to nearly $3 per barrel from a mid-March peak of $15, underscores the cooling geopolitical anxiety regarding Middle Eastern supply chains. Market participants remained focused on ongoing peace talks in Qatar, though no immediate breakthroughs emerged from the second day of negotiations.

Despite the retreat in crude, refined products show a different reality. The WTI 3-2-1 crack spread—a primary gauge for refinery profit margins—sits near the mid-$50s, significantly higher than the $25 historical average. Darren Dohme of The Fuel Hedge noted that while crude exports from the Middle East are expected to rise, persistent bottlenecks between upstream and downstream sectors keep product supplies tight. Domestic data reinforces this divergence: while the EIA reported a 3.8-million-barrel drop in U.S. crude stocks, total U.S. production hit a record 13.934 million barrels per day in April, demonstrating that the domestic industry is operating at its highest capacity since 1920.