Recap: The oil market erased some of its previous gains on Friday but still ended the session up 0.2% on the day and 9.7% higher on the week amid the renewed military strikes between the U.S. and Iran. The U.S. attacks on Iran this week were the strongest clashes between the two countries since July. The crude market posted a high of $92.17 in overnight trading before it started to erase some of its previous gains as it sold off to a low of $88.72 by mid-morning. However, the market bounced off its low and retraced some of its losses during the remainder of the session. The October WTI contract settled up 18 cents at $94.48 and the November Brent contract settled up 76 cents at $96.28. The product markets ended the session in mixed territory, with the heating oil market settling down 5.34 cents at $4.5402 and the RB market settling up 7.97 cents at $3.2146.
Technical Analysis: Ahead of the long Labor Day weekend, the crude market will likely continue to trend sideways unless there is some major news from over the weekend. It will remain supported by the continuing standoff and renewed strikes between the U.S. and Iran. Iranian sources stated that the U.S. campaign focused on hurting Iran’s economy by blockading its oil exports and stopping sanctions evasion is becoming difficult to withstand. It will have be seen whether the Trump administration’s plan works in its favor and pushes Iran to make concessions to end the war. The oil market is seen finding resistance at $92.17, $93.14, $93.26, $93.50, $93.64 $95.47, $95.91 and $97.00. Meanwhile, support is seen at $88.72, $86.13, $84.11 to $83.78, $82.25, $80.65 and $79.62.
Fundamental News: Preliminary shipping data showed that four commodity vessels transited the key waterway of the Strait of Hormuz on Thursday, down from nine a day earlier and well below the 10-day average tally of about 15. So far this week, Kpler data showed only two very large crude carriers crossed the strait. At the Bab el-Mandeb Strait on the Red Sea, 22 commodity vessels crossed on Thursday, down from 31 the day before and below the 10-day average tally of 24.
Citi and ANZ raised their Brent crude forecasts, citing prolonged disruptions to oil flows out of the Middle East. Citi raised its third-quarter 2026 Brent forecast to $86/barrel, saying the current situation, with a U.S. blockade of Iran and reduced Strait of Hormuz flows, is “unsustainable” and will likely lead to renewed deal making or other developments that allow the waterway to reopen in the fourth quarter. Citi said a reopening of the Strait would leave the oil market with an estimated 3-4 million bpd surplus, compared with a previous estimate of about 2 million bpd. The bank raised its third-quarter 2026 Brent forecast to $86/barrel. Meanwhile, ANZ raised its short-term Brent crude forecast to $95/barrel, saying the market is entering a “delicate adaptation phase” as inventories shrink and further demand destruction will be needed to rebuild stocks. ANZ estimates the conflict will remove 2.3-2.4 billion barrels of Persian Gulf supply in 2026, with losses exceeding 2 billion barrels by end-October.
Baker Hughes said U.S. energy firms left the overall rig count unchanged for a second consecutive week. The total oil and gas rig count held at 588 in the week ending September 4th. Baker Hughes said oil rigs increased by 2 to 449 this week, while gas rigs fell by 2 to 130, and other miscellaneous rigs remained unchanged at 9.
IIR Energy said U.S. oil refiners are expected to shut in about 238,000 bpd of capacity in the week ending September 4th, cutting available refining capacity by 214,000 bpd. Offline capacity is expected to increase to 478,000 bpd in the week ending September 11th and further to 493,000 bpd in the subsequent week.
Early Market Call – as of 9:05 AM EDT
WTI – Oct $92.60, up $1.10
RBOB – Oct $3.2421, up 2.66 cents
HO – Oct $4.5797, up 3.95 cents
