Crude Edges Higher as Hormuz Stalemate Persists; Gas Dips on Cooling Led by Northeast and Midwest

Crude edges higher as Hormuz stalemate persists

• The WTI prompt-month contract rose $0.37 to $82.77/Bbl Monday morning (7:30 AM CT)
• The Strait of Hormuz remains at an impasse as the initial MOU expires today without an agreement between the US and Iran to increase energy flows through the waterway
• Additional vessels came under attack in Hormuz late last week, though Gulf producers continue to shuttle significant volumes of crude out of the region, with flows reportedly running above earlier estimates of roughly 4 MMBbl/d, according to Bloomberg
• President Trump has continued to favor economic pressure on Iran over a renewed military campaign, while Treasury Secretary Scott Bessent said additional measures targeting Tehran could be announced this week
• “The threat of unprecedented US measures to economically isolate Iran, an indefinite naval blockade, and renewed tanker attacks raise the risk of further supply disruption,” said Charu Chanana of Saxo Bank
• The WTI Bal 2026 strip is currently trading at $79.90/Bbl, while the Cal 2027 strip is trading at $72.73/Bbl (7:30 AM CT)

Gas moves lower on cooling in the Northeast and Midwest

• Natural gas is down -6.5c to $2.668/MMBtu (As of 07:30 AM CDT)
• Model changes were mixed over the weekend, with some sizable shifts
• • The Northeast and Midwest lost 28°F and 24.5°F respectively
  • The Rockies, South Central, and Western regions gained 17.5°F, 18.2°F, and 6.7°F respectively
  • Overall, the L48 lost 8.2°F in population weighted average temperature (Criterion)
• Average storage week temperatures have been hovering around 78°F for a couple weeks, but cooling is expected over the forecast period to 76.6°F average for the week ending 9/4 (Criterion)
• • Milder summer temperatures could expand the storage surplus heading into winter
• Freeport remains at partial rates, with three-train operations expected to start again later this month

Coal-fired generation to continue shrinking

• The EIA reported in its STEO that coal-fired generation will be 6% lower year over year, and projected it to continue to shrink in 2027