If you were waiting for Iranian oil to cool the global oil markets, get ready to wait some more. Oil prices are getting a boost in overnight trading as reports that the Iranian nuclear talks are going to be delayed. That means of course that the return of non-sanctioned Iranian oil is looking less likely. Many analysts have already penciled in a return of Iranian barrels to the tune of a million barrels a day. This delay and the complications with the new hardline Iranian president-elect Ebrahim Raisi will have those betting on those barrels likely exiting the market.

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This comes as OPEC plus tries to decide on whether or not they're going to raise production by the expected 550,000 barrels or surprise us with 1,000,000 barrels a day. As we've said many times before, we think that OPEC needs to raise production by more than a million barrels a day to meet growing demand. So it is unlikely that even if OPEC decides to raise production by 1,000,000 barrels a day, it will have any lasting impact on the price. There were some reports that some OPEC members are very worried that the new variant of the COVID-19 could slow demand and lead to an increase in oil supplies in the second half of the year and that may cause OPEC to not try to surprise us with a larger than expected increase.

Global oil inventories are falling and we got more evidence that U.S. inventories are falling as well. U.S. oil inventories will probably fall for the 6th week in a row when we get today's Energy Information Administration (EIA) report at 9:30 central time. The American Petroleum Institute (API) in their version of the report, reported a whopping 8.153 million barrel drawdown in crude oil supplies. That puts U.S. crude supplies well below average for this time of year.

The API also reported another big drop in the Cushing, OK delivery point of 1.318 million barrels. The Cushing, OK delivery point is getting perilously close to its lower operating capacity.

The API reported that gasoline supplies rose 2.418 million barrels. That increase of course is welcome as it is expected that 4th of July travel is going to hit a record high at least according to Triple-A.

Pent-up demand is going to keep gasoline prices at the pump on the rise as we head into the holiday weekend. We still have concerns about trucking shortages and the inability of drivers to get gasoline to the stations which means some parts of the country, believe it or not, could see some shortages. Though it will not be as widespread as what we saw after the Colonial Pipeline shut down, it is something that could happen.

The API also reported that distillate inventories also by a measly 428 thousand barrels.

Today will be a big day for grain prices as we get the USDA report. There's some expectation we're going to see a lot more planted acres of corn and while that is true, it may still come up short. This may have a big impact on ethanol prices. The price of corn has already been hurt because of the Supreme Court ruling that found in favor of refiners.

Natural gas has been on fire and it is driving up the futures prices as well. Andrew Weissman of EBW Analytics says that "surging spot physical demand helped jump-start the rally, led by blistering heat across the Pacific Northwest and rising LNG feed gas. Tuesday’s intraday top at $3.811, however, may mark a short-term top for the front-month contract. More broadly, the 55¢/MMBtu increase in August 2021-March 2022 natural gas futures since the end of May represents the long-awaited re-pricing of the NYMEX forward curve inline with bullish underlying core fundamentals. Natural gas may struggle to retain recent gains in the near term, but the entirety of recent price increases is fundamentally justified, with natural gas still 1.0 Bcf/d undersupplied in the most likely scenario.