Weekly Market Summary — Sep 25, 2026

Crude Oil

Crude Pulls Back as Diplomacy Returns While Supply Risks Persist

Crude prices moved lower this week as improving Middle Eastern flows eased some of the immediate supply concerns that had pushed WTI above $100/Bbl. Saudi Arabia has restarted flows through its 7 MMBbl/d East-West pipeline, while the head of US Central Command said crude flows through the Strait of Hormuz recently reached a six-month high.

On the sidelines of the UN General Assembly, the US and Iran discussed a phased agreement that could eventually reopen Hormuz and lift the American blockade on Iranian ports, with Tehran submitting a proposal that included conditions similar to those outlined in the June memorandum of understanding. However, any agreement would likely take time to translate into normalized shipping and higher physical flows.

That tightness remains visible in the physical market. The premium required to secure crude at Cushing rose to its highest level in data going back to 2017, with the WTI cash roll surging above $7/Bbl Thursday. Inventories at the hub have recovered from critically low levels but remain near their lowest seasonal level in more than a decade, while US refiners are running record crude volumes for this time of year and overseas demand for American barrels remains elevated.

At the same time, broader inventories continue to tighten. Crude stocks are estimated to have fallen by roughly 57 MMBbl through the first 18 days of September, led by onshore draws in Asia. The market therefore has fewer buffers than earlier in the conflict, meaning any renewed disruption or setback in negotiations could still have an outsized effect on prices.

AEGIS has shifted its Bal 26 WTI view from neutral to bullish. Crude flows through Hormuz have recovered, limiting some of the immediate upside pressure on prices. However, that recovery may also increase the risk of renewed escalation if Iran seeks to disrupt those flows and restore leverage over the oil market. We now see Bal 26 risks tilted to the upside, while normalization remains the primary downside risk.

For Cal 27, we remain neutral. The underlying balance still appears considerably more bearish if Middle Eastern flows normalize and expected supply growth materializes, but the size of that surplus remains highly dependent on the duration of the conflict. Continued supply constraints into 2027 could materially tighten the balance, while normalization would shift attention back toward oversupply and lower prices.

Natural Gas

Pipeline outage sends natural gas prices higher

Prompt month natural gas prices traded sharply higher this week following a pipeline outage in the Northeast. The October contract gained 23c to settle at $3.15/MMBtu but traded as high as $3.30/MMBtu. The Winter ‘26/’27 strip finished the week at $3.39/MMBtu but traded up to $3.53/MMBtu during the week. The Summer ’27 strip was relatively unchanged and continues to trade just above $3/MMBtu.

Gas prices moved higher throughout the week, starting on Tuesday with a 15c gain. However, this move was dwarfed by a 26c gain on Thursday. On Thursday morning, Columbia Gas Transmission (TCO) declared force majeure after a mechanical issue was detected on the Mountaineer Express Pipeline. Flows were reduced to zero, stranding 1.8 Bcf/d in the Northeast, and reducing southbound flows out of Appalachia. A timeline for when the pipe would be returned to service was not given, leading to a sizeable move across the next several contracts. While the Winter ‘26/’27 strip gained 10c on the week, it was initially up about 15c. Prices pulled back somewhat on Friday, but the date on which service will return to normal remains unknown. According to data from S&P, Lower-48 gas production fell to 107.5 Bcf/d, compared to 112 Bcf/d last week. Supply had already been moving lower this week, but the outage exacerbated it.

The substantial price move may have also been somewhat driven by short covering, as speculators have built large short positions in NYMEX Henry Hub. According to data from the CFTC, non-commercial traders held the largest net-short position since 2020. As the TCO outage sent prices higher, some traders likely had to cover short positions and this may be what resulted in materially higher winter prices, despite the likelihood that the outage is resolved by then. Market participants will be awaiting new information from TCO on the outage as they attempt to price in the full impact. If the outage were to continue longer than a few days, the reduced supply will begin to result in smaller storage builds.

Basis pricing was also impacted. With 1.8 Bcf/d of gas now stranded in the Appalachian basin, Northeast basis weakened, while downstream points strengthened. This drop in takeaway capacity has come at the same time that Cove Point LNG has gone into its yearly maintenance. These factors combined, may result in production curtailments in the Northeast, until demand and pipeline takeaway normalizes.