As the peak of the summer driving season approaches, the market is particularly sensitive to the ups and downs of US gasoline inventories. In data released on 21 June for the week to 16 June, gasoline stocks increased by only 0.1 per cent to 213.4 million barrels – less than predicted. Crude supplies were up by 0.4 per cent to 347.1 barrels.

Tehran has said it will respond by mid-August to the package of incentives presented to it by the UN to abandon its nuclear research programme. On 18 June, Foreign Affairs Ministry spokesman Hamid Reza Asefi accused Washington of attempting to scupper a potential deal, while President Bush responded on 21 June by saying that mid-August seemed like an ‘awfully long time’ to take to respond.

Saudi Arabia’s ambassador to the US, Prince Turki al-Faisal, added a further bullish note on 20 June, warning that oil prices could triple in the event of a military strike on the Islamic republic.

US Energy Secretary Samuel Bodman was more sanguine, although he said that the US government had not specifically studied the potential impact. ‘I believe we…would be in reasonably good shape by making use of our Strategic Petroleum Reserve,’ he told reporters on the same day.

OPEC released a relatively bearish monthly report on 19 June. While there was no downward revision in its 1.4 million-barrel-a-day 2006 demand growth forecast from the previous month’s study, the group warned that high prices were beginning to have an affect. ‘Even though the largest share of the increase in world oil demand growth is mainly in the developing countries, signs indicate an easing in oil demand, partly due to the high oil prices,’ it said.