Crude eases into July 4 as OPEC pumps 3.3 million more barrels a day; California's tax hits 63.4 cents
Pump prices came down heading into the holiday weekend, and the reason is more barrels. OPEC's 11 members produced 19.43 million bpd in June, up 3.3 million from May, according to Reuters' monthly survey, as Gulf producers began restarting output that had stopped when the Strait of Hormuz closed. Brent traded in a narrow $71 to $73 band all week. For anyone buying wholesale gallons, that softness is the story of the last 24 hours.
The relief is real but it is not a return to normal. May's number was the lowest the Reuters survey had recorded since at least 2000, so a 3.3 million barrel jump still leaves the cartel well short of pre-crisis flows. AAA-tracked pump prices dipped for July 4 but remain above where they were in 2025. Diesel and heating oil eased in the latest wholesale adjustment while gasoline held roughly flat.
If the strait stays open and Gulf barrels keep coming back, crude could ease further. Jobbers are pricing off that possibility this weekend.
California's 63.4 cents
California's gasoline excise tax rose to 63.4 cents a gallon on July 1, the CARB-set annual inflation adjustment. It lands the same week the state is telling drivers to comparison-shop at the pump, with the message aimed at high-price regions like Kern County. For haulers running California lanes, the higher per-gallon tax is now baked into every load, and it widens the gap between California retail and the states next door.
California was already near the top of the price tables. The new rate keeps it there.
The DOJ letter
The Justice Department is asking states to open investigations into gasoline pricing. Details are thin so far, and it is a request to state authorities rather than a federal action, so the near-term effect on any single c-store operator is probably nothing. Worth flagging anyway. When Washington starts talking about price probes into a falling market, it usually means margin questions land on retailers next, not refiners.
Treasury Secretary Scott Bessent spent the week on gas prices and affordability across CBS and other outlets, and said China remains Iran's main oil buyer even as US pump prices fall. The affordability framing and the DOJ letter are pointed in the same direction.
Ethanol and E15
Ethanol production hit an 11-week high as demand rose, and E15 is being pushed as the cheaper holiday-travel fuel. For blenders and c-stores carrying the 15 percent blend, stronger output means supply is there to meet the summer pull. The economics favor the operators who already have E15 dispensers in the ground.
What to watch
Whether Gulf barrels keep returning is the swing factor. OPEC output rebounded hard in June but is still far below pre-Hormuz levels, and research shops including the EIA are recalibrating their 2026 and 2027 supply outlooks around how long the strait stays open. Two Russian refineries, Lukoil's Kstovo plant among them, stopped operations after drone strikes on July 2, which tightens product supply at the margin even with crude easing. Watch whether the DOJ price-probe request turns into actual state investigations, and whether the post-holiday adjustment pulls gasoline down to match diesel.