Crude Pulls back as Traders Weigh Hormuz Deadlock; Gas Trims as Eastern Forecast Gives Back Heat

Crude pulls back as traders weigh Hormuz deadlock

• The WTI prompt-month contract fell $1.95 to $81.32/Bbl Thursday morning (7:30 AM CT)
• Crude prices moved lower amid a relatively quiet geopolitical backdrop and limited new developments from the Middle East
• President Trump has said the US has “total control” over the Strait of Hormuz, while increasingly emphasizing economic pressure through sanctions and the ongoing naval blockade rather than renewed military action
• Tahir Andrabi, a spokesperson for Pakistan’s Foreign Ministry, said talks between the US and Iran have stalled, offering little indication of near-term diplomatic progress
• DNB Bank analyst Helge Andre Martinsen said the limited Middle East news flow, absence of fresh attacks in the Strait of Hormuz, and signs of increased ship-to-ship activity in the Gulf of Oman were enough to weigh on crude prices
• Domestically, US crude inventories posted a sharp 17.4 MMBbl build last week, according to the EIA
• • The increase lifted commercial crude stockpiles to 424.4 MMBbl, narrowing the deficit to the five-year average for this time of year to just 2%

Natural gas trims 2c as the Northeast gives back some heat

• Natural gas is down -2.1c to $2.783/MMBtu (As of 07:26 AM CDT)
• Overall L48 forecasted temperature changes were minor, however there was some cooling in the Northeast and Midwest (Criterion)

The EIA reports its weekly natural gas storage report today, with a median analyst estimate of a 31 Bcf build in inventories as reported by Bloomberg

• In it’s August STEO, the EIA said it expects L48 inventories to reach 3.985 Tcf by the end of October
• They attributed record production mainly to the Permian, which they cite could average 29.2 Bcf/d of marketed gas in 2026, up 6% year-over-year

The EIA forecasted the average 2026 Henry Hub price at $3.44/MMBtu, with an average Q3 price of $2.87/MMBtu

• They lowered their Q3 estimated price by 50c since last month due to reduced feedgas demand and robust production