Recap: The oil market rallied higher, trading above the $90 level for the first time since June 11th after Yemen’s Houthis said they attacked two Saudi oil tankers in the Red Sea, causing further supply disruptions. The escalation compounds the near halt in the Strait of Hormuz and the reduction in Iranian exports, increasing concerns over near term supplies. The market was also well supported by U.S. President Donald Trump’s statement that he was considering restarting major combat operations in Iran after stating that he would hold Iran accountable for any attacks by Yemen’s Houthi militants. The crude market opened higher in overnight trading, posted a low of $87.32 and never looked back as it rallied higher. The market extended its gains throughout the session, rising over $6.60 as it posted a high of $93.50 ahead of the close. The September WTI contract settled up $5.36 at $92.19 and the September Brent contract settled up $6.62 at $100.69. The product markets also ended the session sharply higher, with the heating oil market settling up 19.28 cents at $4.3416 and the RB market settling up 8.17 cents at $3.4964.
Technical Analysis: The crude market is seen continuing its upward trend so long as the concerns over further supply interruptions remain amid the restrictions at the Strait of Hormuz and now at the Bab el-Mandeb Strait. The market will also remain well supported by the threat of a ground war increasing, with President Trump promising “major military punishment” for Iran and its Houthi allies. The oil market is seen finding resistance at $93.50, $94.02, $94.71, $95.07, $95.30, $95.47, $95.91, $97.00 and $99.43. More distant resistance is seen at $102.66, $104.45 to $106.76. Meanwhile, support is seen at $87.32, $84.44, $82.25, $81.39, $79.58, $77.93 and $77.39.
Fundamental News: BP said that it was returning non-essential personnel to its Thunder Horse and Na Kika platforms. The company had removed some non-essential personnel from the two platforms in the U.S. Gulf of Mexico earlier this week as a precaution ahead of Tropical Storm Bertha.
Three sources said OPEC+ oil-producing countries will likely agree to a further increase in their output targets from September when they meet on August 2nd, even though the U.S. war with Iran is again hindering some of the group’s members from pumping more. Seven core OPEC+ members, Saudi Arabia, Russia, Iraq, Kuwait, Algeria, Kazakhstan and Oman, will likely increase their output target by about 188,000 bpd for September, the same as for June, July and August.
According to five trading sources, Saudi Aramco has offered additional crude cargoes for loading from Egypt’s Mediterranean port of Sidi Kerir, as Houthi threats to Saudi shipping raise risks for southbound Red Sea exports through the Bab el-Mandeb Strait.
Goldman Sachs maintained its Brent crude forecast of $80/barrel for the fourth quarter of 2026, saying lower Middle East supply should support prices if tensions between the United States and Iran ease by year-end. The bank expects oil prices to retain most of their recent gains through July and August as global inventories continue to draw, supported by lower Middle East production, seasonal summer travel demand and a decline in strategic petroleum reserve releases by OECD countries. The bank maintained its view that Brent and U.S. West Texas Intermediate crude would average $75 and $70/barrel, respectively, in 2027, assuming the Strait of Hormuz remains open. Despite a projected 2027 surplus of 3.2 million bpd, the bank does not expect Brent to fall below the high-$60s because of 1.2 million bpd of global strategic stockpiling in 2027, and the price sensitivity of U.S. shale and of supply disruptions. The bank also highlighted two-sided risks to its forecast, saying it could see Brent exceeding $120/barrel by the fourth quarter of 2026 and averaging $100 in 2027, if Hormuz remains disrupted. On the downside, it sees Brent declining to the low $60s by end-2027 if supply exceeds expectations and demand losses prove more persistent.
Early Market Call – as of 9:40 AM EDT
WTI – Sep $90.30, down $2.06
RBOB – Aug $3.4002, down 9.28 centsHO – Aug $4.2144, down 14.26 cents
