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Palm oil futures retreated for the second consecutive trading day as Indonesia’s B50 policy plan and concerns over El Niño coexist. Are there still uncertainties in forward supply and demand?

Golden Ten Data reported on June 25 that the UK Society of Motor Manufacturers and Traders (SMMT) stated that, due to an increase in exports to the United States, UK car production grew by 2.7% year-on-year in May, ending a previous four-month decline. However, the industry body warned that high energy costs, trade risks, and weak demand for electric vehicles continue to threaten the sector’s competitiveness. SMMT CEO Mike Hawes said: “Manufacturers are investing billions of pounds in zero-emission technologies, but weak underlying demand and rising compliance costs are putting competitiveness, jobs, and future investment at risk.” Data shows that in May, total UK car production rose to 51,178 units, with passenger car output up 3.2% year-on-year to 49,249 units, while commercial vehicle production fell 7.6% year-on-year to 1,929 units. Car exports to the United States surged by 83.1% last month, but exports to the EU and China declined by 5.2% and 14.3%, respectively. In the first five months of this year, total UK car production fell by 8.7% year-on-year to 317,779 units.

Although inventories at the US crude oil delivery hub in Cushing have fallen to their lowest level since 2014, West Texas Intermediate (WTI) prices briefly dropped below $70 a barrel on Wednesday, eventually closing at $70.34. The divergence between inventories and prices highlights the weakening status of Cushing as the benchmark for US crude oil pricing.According to a report from the US Energy Information Administration, Cushing crude inventories fell to about 19 million barrels last week, below the generally recognized minimum threshold of 20 million barrels needed for normal operations. When storage falls below 10% to 20% of capacity, oil extraction becomes more difficult and water quality issues may arise. In theory, critically low inventories should support oil prices, but the market has responded in the opposite direction.Market analysts point out that the current price decline is more a continuation of emotional sell-offs. Some funds are continuously suppressing futures prices to seek out weak support levels and prepare for profit-taking on a rebound. Although fundamentals (such as inventories and supply disruptions) should support higher oil prices, market sentiment has overwhelmed fundamental signals.Behind Cushing’s declining importance is a structural shift in US oil flows. Shale oil production in the Permian Basin has surged, but an increasing volume of crude is flowing directly to export terminals and refineries along the Gulf Coast, rather than through the Cushing hub. According to a senior trader, the marginal factor affecting the oil market has now shifted to export capacity on the Gulf Coast.Looking ahead, analysts anticipate that US oil exports will slow next month, with more crude returning to Cushing. Energy consultancy Energy Aspects estimates that Cushing inventories will increase by about 800,000 barrels next week. As shipping through the Strait of Hormuz gradually recovers, increased global supply may further suppress oil prices, and the marginal impact of Cushing inventories is likely to continue to weaken.