Recap: The oil market traded higher as the market weighed the latest developments regarding talks to reopen the Strait of Hormuz. While Qatar’s Foreign Ministry said talks between Oman and Iran over shipping in the Strait of Hormuz are at an advanced stage, there has been no real meaningful progress, with Iran stating that the Strait of Hormuz will remain closed as long as the U.S. does not change its behavior and accept Iran’s conditions to end the war. This followed an exchange of demands between the U.S. and Iran, which are complicating efforts to reopen the Strait of Hormuz. Shipping through the Strait of Hormuz remains low, with six vessels moving through the waterway on Monday, compared with a 10-day average of about 11 vessels. The crude market rallied to a high of $84.61 in overnight trading before it sold off to a low of $81.27 by mid-morning amid the Qatari statement. However, the market bounced off its low and settled in a sideways trading range. The September WTI contract ended the session up $1.07 at $83.20 and the October Brent contract settled up $1.19 at $88.91. The product markets ended the session higher, with the heating oil market settling up 6.27 cents at $4.2525 and the RB market settling up 12 points at $3.1366.
Technical Analysis: The oil market will continue to trade in its recent trading range amid doubts over a potential U.S.-Iran peace deal. Iran’s latest statements regarding the Strait of Hormuz remaining closed unless the U.S. changes its behavior and accepts Iran’s conditions is an indication that any deal with Oman over the waterway would not immediately reopen it to shipping if the U.S. does not abide by its commitments it agreed to in June under the memorandum of understanding. The crude market is seen finding support at $81.27, $77.79, $76.53, $74.57, $74.57, $74.24, $72.51, $70.68, $68.61, $67.82 and $67.12. Meanwhile, resistance is seen at $84.61, $86.14, $86.87 to $87.68, $92.83 and $93.50.
Fundamental News: The EIA forecast 2026 global oil output of 100.8 million bpd, down 1.1 million bpd from a previous forecast and sees 2027 output of 109.7 million bpd, down 100,000 bpd from a previous estimate. It expects ongoing disruptions to Mideast crude output of about 600,000 bpd to continue through the end of 2027. It said Mideast oil output shut-ins averaged 5.5 million bpd in July. U.S. oil output in 2026 is expected to total 13.8 million bpd, up 20,000 bpd from a previous estimate, while 2027 output is forecast at 14.15 million bpd, up 120,000 bpd from a previous forecast. The EIA sees 2026 world oil demand of 102.7 million bpd, down 100,000 bpd from a previous estimate, while 2027 oil demand is expected to increase to 105 million bpd, which is up 200,000 bpd from a previous forecast. U.S. oil demand is estimated to total 20.6 million bpd, up 100,000 bpd from a previous estimate, while demand in 2027 is seen at 20.8 million bpd, unchanged on the month. The EIA reported that WTI crude spot prices will average $80.88/barrel in 2026, up from a previous forecast of $76.26/barrel. The price of Brent crude is expected to average $86.81/barrel in 2026, compared with a previous forecast of $81.91/barrel.
Pemex reported the continuation of work activities that may cause flaring at its Deer Park, Texas refinery. Work activities began on August 4th.
Phillips 66 reported emissions at its 149,000 bpd Borger, Texas refinery.
Libya’s National Oil Corporation said it could declare force majeure and completely halt operations at the 120,000 bpd Zawiya refinery if drone attacks on oil assets in the city continued, after reporting a third such attack on Sunday and Monday.
Early Market Call – as of 8:55 AM EDT
WTI – Sep $83.18, down 5 cents
RBOB – Sep $3.1103, down 3.87 cents
HO – Sep $4.2574, down 1.78 cents
