Weekly Market Summary — Oct 9, 2026

Crude Oil

Crude Rebounds as Hormuz Attacks Threaten Flow Recovery

Crude prices moved higher this week as renewed attacks on vessels threatened the recent recovery in Middle Eastern exports. Crude flows had improved substantially, with banks and analytics firms estimating regional exports near or at pre-conflict levels. However, attacks on commercial vessels have accelerated, raising questions over how durable that recovery will prove.

Iran has increased its attacks on vessels, likely in response to the rising number of export barrels transiting the Strait of Hormuz. The UKMTO has recorded at least 12 incidents involving vessels near the strait so far in October, including a strike near Qatar that raised concerns attacks could spread deeper into the Persian Gulf. Kpler estimates crude flows through Hormuz fell 27% from the previous week’s wartime peak to 10.1 MMBbl/d, equivalent to 74% of prewar levels.

The Atlantic reported that the White House is considering renewed military strikes against Iran that could be carried out before the midterm elections. However, countering these reports, Trump said on social media that the US will not attack Iran before the midterms. Elsewhere in the Middle East, the Houthis’ September offensive expanded their control toward the Red Sea coast, increasing their ability to threaten shipping near the Bab el-Mandeb Strait and adding another source of regional supply risk.

Even as more barrels move out of the region, the recovery has yet to eliminate broader market tightness. The EIA estimates Middle Eastern production shut-ins will still average roughly 4.5 MMBbl/d in 4Q26 and expects global inventories to decline by another 0.7 MMBbl/d during the quarter. Transportation constraints are also keeping delivered crude costs elevated, as ship-to-ship transfers, longer voyages and higher insurance costs reduce tanker availability. Against that backdrop, the EIA raised its 4Q26 WTI forecast to $97/Bbl from roughly $86/Bbl last month.

AEGIS maintains a bullish view on Bal 26 WTI. Higher Hormuz flows have provided some relief, but tightening inventories, elevated transportation costs and the recent increase in vessel attacks highlight how quickly that progress could reverse. 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 EIA projects global inventories to build by roughly 4.9 MMBbl/d next year as regional production recovers and alternative export capacity expands. That considerably more bearish balance supports lower prices in 2027, although the timing of the Middle East recovery remains a key uncertainty.

Natural Gas

Natural gas reverses last week’s losses as storage surplus continues to tighten

The November Henry Hub contract finished the week higher by 16c at $3.20/MMBtu, reversing losses from the prior week. The Winter ‘26/’27 seasonal strip gained 19c to settle at $3.42/MMBtu, the highest level in about two weeks. Meanwhile, Summer ’27 rose 5c to $2.97/MMBtu.

One of the main items impacting gas markets this week is the incoming Hurricane Isaias, forecasted to make landfall Saturday morning between Alabama and Florida. The storm will track over the gulf and has already led to precautionary shut-ins of offshore oil and gas production. The impact of the storm will likely not be substantial, as offshore gas production is only a small percentage of total US supply, and onshore demand losses will offset much or potentially all of the tightening, as seen during previous hurricanes. Typically, hurricanes result in lower gas demand as power outages and lower temperatures reduce electricity consumption. Meanwhile, offshore production will should normalize fairly quickly in the days following the storm.

Lower-48 inventories continue to tighten toward the five-year average, seen for the eighth consecutive week on Thursday. The EIA reported a 85 Bcf injection, which was slightly larger than median analyst expectations, but still smaller than the five-year average injection for the corresponding week. Storage levels are now only 68 Bcf above the five-year average compared to nearly 200 Bcf eight weeks ago.

While storage levels look considerably less bearish heading into this winter, many of the same risks remain. Permian gas supply is still rising sharply, LNG feedgas demand growth from Golden Pass LNG remains slow, and the forecasted El Niño may result in a milder winter. However, with inventories looking to start winter closer to the five-year average rather than at a five-year high, it could be looked at as marginally less bearish, at least compared to eight weeks ago. Following expected loose conditions in the first half of 2027, the second half of the year onwards looks considerably more bullish as demand growth accelerates.