Weekly Market Summary — Sep 18, 2026

Crude Oil

Crude Settles Above $100 as Saudi Supply Risks Add to Hormuz Disruptions

Crude prices remained elevated this week as attacks on Saudi energy infrastructure threatened one of the region’s most important alternatives to shipping through the Strait of Hormuz. Saudi Arabia halted its 7 MMBbl/d East-West pipeline following drone strikes, temporarily removing a route that has allowed crude to move toward the Red Sea while Hormuz traffic remains constrained. The outage helped push WTI above $104/Bbl early in the week before prices eased as Saudi Arabia began working to restore roughly half of the pipeline’s capacity. On Friday, the front-month WTI contract settled at $100.30/Bbl.

The partial restart should provide some relief, but the disruption has highlighted how vulnerable alternative export routes have become. Aramco has informed some European refiners that they will not receive Saudi crude next month, while Houthi advances toward the Bab el-Mandeb Strait continue to threaten Red Sea shipping. Hormuz also remains heavily disrupted by the US-Iran conflict, leaving Persian Gulf producers increasingly dependent on a limited number of pipelines, escorted tanker movements and ship-to-ship transfers to maintain exports.

The physical market continues to show signs of tightening beneath the geopolitical risk premium. Global crude stocks declined by 44 MMBbl through the first 11 days of September, led by onshore draws in China, while US commercial inventories unexpectedly fell by 0.6 MMBbl last week. At the same time, the path toward de-escalation has become harder to define. JPMorgan said the duration of the war and its impact on oil flows have become increasingly difficult to forecast as several economic thresholds previously viewed as potential constraints have already been crossed. The bank added that the assumption that current disruptions are temporary is becoming harder to sustain without a diplomatic breakthrough.

Separately, the Federal Reserve raised interest rates by 25 basis points this week and signaled another increase could follow in 2026. Sustained monetary tightening could weigh on economic growth and oil demand, particularly into 2027, while higher US rates could also support the dollar and create an additional headwind for crude.

AEGIS maintains a neutral view on WTI. Constrained Hormuz traffic, tightening inventories and growing risks across both Gulf and Red Sea export routes continue to support prices. However, the partial restoration of Saudi pipeline capacity shows how incremental flows can ease short-term supply concerns, although the longer-term balance remains considerably more bearish. With neither the US nor Iran showing clear signs of de-escalation, the duration of the disruption remains the key uncertainty for prices.

Natural Gas

October natural gas gains, winter falls to new low

The October NYMEX contract rose 7c to settle at $2.90/MMBtu, partially reversing last week’s 15c decline. Despite this, much of the forward curve traded lower. The Winter ‘26/’27 strip fell 7c to settle at $3.29/MMBtu, which is a new low for the seasonal strip. Summer ’27 lost 2c to finish the week at $3.02/MMBtu.

The seasonal strip for this upcoming winter has steadily trended lower over the past several months, reaching new lows of less than $3.30/MMBtu this week. Several factors have weighed on this tenor, mainly rising supply from the Permian and expectations of a potentially warmer winter due to the forecasted super El Niño. A rising Lower-48 storage surplus through much of this summer also weighed on pricing, but for the past five weeks the surplus has narrowed considerably. Surprisingly, the smaller surplus has had little impact on winter pricing. This is potentially due to the narrowing surplus having been driven by strong power demand and hot temperatures, and with summer cooling demand fading, the market may once again shift into an oversupplied regime.

Despite falling prices, call-put option skew has been rising. This dynamic can be seen across the entire curve for natural gas options but is especially pronounced for the Winter ‘26/’27 season, with skew now at the highest level since early 2026. This can be a benefit to producers who use costless collars, as it can allow for a higher floor price. While skew for the next two winter seasons is strong, it is not as pronounced in the next two summer seasons, although these strips are also in call skew, and not put skew as has been the case in some historical periods.

This week’s EIA report showed the Lower-48 storage surplus shrank for a fifth week, and by the most since last winter. Inventories are now 118 Bcf above the five-year average, the smallest surplus since March. However, cooler temperatures over the next two weeks may result in storage builds once again rising above the five-year average rate and undoing some of the recent tightening.