Weekly Market Summary — Oct 2, 2026

Crude Oil

Crude Pulls Back as Supply Relief Builds Despite Escalation Risk

Crude prices moved slightly lower this week as recovering Middle Eastern flows eased some of the immediate supply concerns. Saudi Arabia restored flows through its East-West pipeline, with throughput now above 80% of capacity and roughly 4.5 MMBbl/d available for exports. Tanker traffic through the Strait of Hormuz has also improved materially, contributing to a broader recovery in regional exports. Goldman Sachs estimates crude exports from Persian Gulf producers reached roughly 19 MMBbl/d, while JPMorgan puts the 10-day average of Middle East crude exports at 17.5 MMBbl/d, both near prewar levels.

Potential supply relief emerged late in the week after the G7 announced plans to release up to 100 MMBbl of crude and diesel from government stocks. However, the amount of incremental supply is expected to fall well short of the headline figure, as the total includes previously announced commitments, including US SPR loans and European diesel releases, as well as some barrels that have already been delivered. The announcement is expected to provide some prompt relief to tight diesel markets but appears aimed largely at easing political pressure and reducing the likelihood of a U.S. diesel export ban rather than materially changing the broader oil balance.

Despite the recovery in crude exports, geopolitical risks remain elevated. Middle Eastern refined-product flows are still well below prewar levels, while attacks on vessels transiting Hormuz continue. The recovery in crude flows could also create its own source of risk by reducing Iran’s leverage over the oil market and potentially increasing Tehran’s incentive to disrupt shipping again. Meanwhile, the Pentagon is deploying a third aircraft carrier and roughly 9,000 additional personnel to the region, underscoring the continued risk of another escalation.

AEGIS maintains a bullish view on Bal 26 WTI. Recovering crude flows are easing short-term supply concerns, but inventories and other market buffers remain tight, and the risk of further disruption remains elevated. We continue to see near-term risks tilted to the upside, while normalization remains the primary downside risk.

We remain neutral on Cal 27. The 2027 balance remains considerably more bearish, with the EIA projecting inventory builds of roughly 4.9 MMBbl/d. However, the size of that surplus remains highly dependent on the timing and extent of a recovery in Middle Eastern supply.

Natural Gas

Natural gas reverses last week’s gains as supply normalizes

The November Henry Hub contract fell 18c to $3.05/MMBtu, reversing all of the gains from last week. Meanwhile, the Winter ‘26/’27 strip fell 18c to $3.23/MMBtu, making new lows this week. The Summer ’27 strip lost 10c to settle at $2.92/MMBtu and Winter ‘27/’28 fell 12c to $3.88/MMBtu.

The selling in the prompt month and across much of the curve was driven by a reversal of last week’s events, which resulted in a sharp move higher. Last week, TCO reported an issue which resulted in 1.8 Bcf/d of gas being stranded in the Northeast, and reduced supply heading downstream. The issue was repaired by Sunday, earlier than many expected, and flows on that segment of pipe quickly normalized. Total production in the Northeast remains lower due to a separate issue on a DT Midstream gathering line, however the market appears to be less concerned.

The selling across the curve came despite the seventh weekly reduction the storage surplus, with inventories now only 79 Bcf above the five-year average. As the surplus has come down over the past two months, estimates for the amount of gas in storage at the start of winter have also been reduced. While previously, it looked like inventories would start winter near the top of the five-year range, storage levels may only be slightly above the five-year average in November. However, robust production growth from the Permian and continued weakness in LNG feedgas demand due to a slow commissioning of Golden Pass LNG are likely weighing on prices. Additionally, concerns of a warmer than average winter due to the forecasted record El Niño persist.

However, while the slow speed of Golden Pass’s ramp may be weighing on prices this year, it could push the commissioning of Trains 2 and 3 later into 2027, when the startup of Rio Grande, Calcasieu Pass 2, and Port Arthur LNG should be commencing. With a considerable amount of demand set to arrive from the second half of 2027 through the following few years, the fundamentals look particularly tight during this period.