Week 31 Opens: Crude Pulls Back Sharply

Monday, August 3, 2026. CRUDE OIL MARKET UPDATE: WTI trading near $80.00-$80.50 (down sharply ~$4.35 or -5.14% from prior close of $84.67). Trading levels ~$80.32 (down ~4.9-5.4%); other feeds show ~$80.09-$80.56. Prior session close (Aug 2) Sep 2026 contract settled near $80.63-$80.78 (down ~4.6-4.8%). CME futures snapshot (Aug 2 close) Sep 2026 (CLU6) at 80.78 (-3.89/-4.59%); Oct 2026 at 78.45 (-3.04/-3.73%). Daily range (recent sessions) lows near $78.78-$81.06; highs up to $86.87 (reflecting volatility). Recent trend context prices had been holding near/above $84-$85 recently (July strength), but faced steep decline into early Aug. Related markets Brent similarly lower (~$83.60 range). Sector backdrop US drillers reported turning more cautious while WTI held near $85; sustained demand and supply factors but highlights near-term volatility. NATURAL GAS MARKET UPDATE: Latest spot price (Jul 27, 2026) $2.63/MMBtu (down from $2.87 prior day). Nearby futures (Sep 2026, NGU26) trading around $2.76-$2.79/MMBtu (as of Aug 2). Aug 2 trading levels approximately $2.72-$2.75/MMBtu. Jun 2026 monthly average $3.15/MMBtu. Note EIA spot price data released with lag; next release scheduled Aug 5 for Aug 3 data. STRAIT OF HORMUZ TANKER TRAFFIC: Live tracker (Aug 3 update) 19 ships transited in last 24 hours (16.7% of normal ~60/day average). Ships currently underway 10 ships. Daily throughput ~1.5 million DWT (15% of 10.3 million DWT average). Vessels waiting 287 vessels (including 142 tankers). Strait status CLOSED (since Feb 28, 2026; 156+ days). Windward intelligence (around Aug 1) crossings rebounded to 19 vessels (10 outbound, 9 inbound); some dark transits (AIS off); no sanctioned crossings. Jul 31 snapshot (Windward) only 5 vessels transited in prior 24 hours (vs. pre-crisis baseline ~140). Mid-July patterns (Kpler/NYT, Jul 16) just 13 ships on one day during US naval blockade enforcement (down from 21 prior day); most using Iranian-mandated route. Early Jul lows traffic fell to multi-week/two-month lows (e.g., 6 tankers on one day per Kpler/Reuters) amid renewed US-Iran strikes and vessel attacks. Jun context (post-deal/ceasefire attempts) traffic remained low/trickling at 5-10 ships daily (far below pre-war 130-140 vessels); gradual increases but not to normal levels. Broader crisis commercial tanker passage near collapse/fraction of normal since Mar 2026; selective/controlled transits, dark shipping, seizures, attacks, rerouting. Normal pre-crisis levels ~60+ ships/day or higher for tankers; current volumes reflect extreme war-risk premiums, insurance issues, enforcement actions. CRUDE OIL INVENTORY REPORT (EIA): Latest release (Jul 29, 2026) U.S. commercial crude oil inventories fell 7.167M barrels for week ending Jul 24, 2026 (actual vs. +0.7M forecast and prior +2.01M build). Level after Jul 24 draw inventories stood at ~404.5M barrels (7% below five-year average). Prior week (Jul 22 release) inventories rose 2.0M barrels for week ending Jul 17, 2026, to 411.7M barrels (6% below five-year average). Week ending Jul 10, 2026 draw of 1.7M barrels to 409.7M barrels (6% below five-year average). Ongoing trend multiple consecutive weekly draws in Jun-Jul 2026 amid strong refinery demand and Middle East supply disruptions (Iran-related tensions), pushing stocks toward multi-year lows. Refinery activity (week ending Jul 24) inputs averaged 17.3M bpd (97.2% utilization). Next release Aug 5, 2026, for data week ending Jul 31, 2026. EIA Short-Term Energy Outlook (Jul 2026) global oil inventories expected to draw 2.2M bpd average in Q3 2026 (less severe than prior forecasts). Cushing, OK hub stocks notably low in recent months (near operational minimums in some reports), contributing to market tightness. Product inventories (week ending Jul 17) gasoline +0.8M barrels, distillates +1.4M barrels, propane/propylene +6.3M barrels; total commercial petroleum stocks +11.6M barrels. THE READ: Crude WTI near $80.00-$80.50, down sharply -5.14%, from $84.67, Sep 2026 at 80.78, Oct 2026 at 78.45, volatility elevated, US drillers cautious, demand and supply factors sustained. Gas spot $2.63/MMBtu, down from $2.87, futures $2.76-$2.79, Aug 2 levels $2.72-$2.75, Jun average $3.15. Strait of Hormuz 19 ships transited last 24 hours (16.7% of normal), 287 vessels waiting, closed 156+ days, Windward Aug 1 rebound to 19, Jul 31 only 5, volatility, war-risk premiums elevated. Inventories Jul 24 draw 7.167M barrels, level 404.5M barrels (7% below five-year average), prior week build 2.0M, Jul 10 draw 1.7M, consecutive draws, strong refinery demand, Middle East disruptions, multi-year lows, refinery utilization 97.2%. WEEK 31 STRATEGIC POSITIONING THESIS: Crude WTI near $80, down -5.14%, steep decline from $84.67, Sep 2026 80.78, Oct 2026 78.45, volatility elevated, US drillers cautious, demand and supply sustained, Brent lower at $83.60. Gas spot $2.63, down from $2.87, futures $2.76-$2.79, stable near lower levels. Strait of Hormuz 19 ...