Gasoline stockpiles rose by 2.6 million barrels, compared to 891,000 expected by analysts. Fuel demand increased by 94,000 bpd to about 9 million bpd total. Daily average fuel demand has been tepid, or 1.5% lower compared to same period last year, despite the start of the summer driving season.

Here are today’s energy prices:

• West Texas Intermediate July contract: $77.94, up 4 cents. Year to date, U.S. oil has gained 8.7%.
• Brent August contract: $82.03 per barrel, up 11 cents. Year to date, the global benchmark is ahead 6.4%.
• RBOB Gasoline July contract: $2.39 per gallon, down 0.56%. Year to date, gasoline has advanced 14%.
• Natural Gas July contract: $3.05 per thousand cubic feet, down 2.27%. Year to date, gas is up 21.5%.

Still, the Department of Energy sees global demand rising this year by 1.1 million bpd, up from a previous forecast of 900,000 bpd. The increased demand implies a supply deficit with world production expected to rise 800,000 bpd in 2024.

“In the short term, the oil market is likely to tighten,” Martijn Rats, commodity strategist at Morgan Stanley, told clients in a note. The investment bank sees a 1.2 million bpd deficit in the third quarter, which could push Brent prices to $86 per barrel.

OPEC, meanwhile, stuck to its demand growth forecast of 2.2 million bpd on solid global economic growth of 2.8% this year. Those forecasts clashed with a bearish outlook from the International Energy Agency, which sees weakening demand and rising supplies.

Cool inflation data also raised hopes that the Federal Reserve will cut interest rates in September. Lower rates can stimulate economic growth and lift oil demand.

Citi analysts described the recent price action as rangebound, with volatility near a decade low. The bank also expects a tight third quarter due to summer fuel demand, though it anticipates that the planned OPEC+ production increases will make for a “bear market” late in 2024 and into 2025 with Brent falling to $60 per barrel.