Internal Market Brief
Week of July 27 – 31, 2026
Note on the pricing data
The weekly pricing report and attached workbook are stale-dated to a July 30 strip because of a back-end pricing data issue; a revised workbook is to follow. Our own MVBPM daily strip exports run through July 31, so the differential and gas figures below are one session fresher than the emailed tables. Where a number comes from the Jul 30 strip — the forward curves in Fig 3 and the rolling three-month table — it is labelled as such.
Flat-price settles are NYMEX/ICE prompt and unaffected. One reconciliation to note: the commentary quotes Friday WTI as both $84.67 and $84.64 in different paragraphs; $84.67 matches our settle data and is used throughout.
Section 01 · Crude Oil
WTI Erases the Prior Week’s Rally in Two Sessions, Then Grinds Back — and Gives It Up Again Monday
WTI settled Friday at $84.67, down $4.64 (−5.2%) from the prior Friday’s $89.31, having traded as low as $77.78 intraday Tuesday. The entire previous week’s rally was erased in the first two sessions. Then the market clawed back $5.41 over the last three to close at the week’s high — and gave most of that up again Monday, opening $79.56 and settling $80.06, down $4.61.
The sequence was entirely geopolitical. Monday’s $82.61 wiped out the prior week’s gains on Trump comments that Washington was working on a next MOU and peace deal with Iran, alongside a recovery in Kazakh exports out of the Black Sea after Ukrainian attacks had halted CPC loadings. The slide extended Tuesday as the US paused its campaign against Iran following 13 consecutive nights of strikes, with the pause and renewed White House optimism serving as the impetus for the selloff.
That decline was halted by an attempted Iranian surprise attack on US bases in the region. Crude then rallied $5.20 Wednesday on confirmation of joint US–Saudi strikes against Iran-backed militants across multiple sites in eastern Iraq, plus direct US retaliatory strikes on Iran — Washington said Iranian militias in Iraq had launched more than 30 drone attacks in 72 hours against Saudi energy infrastructure and US forces. Friday added 1% after Iran said it had stopped two vessels seeking to exit Hormuz and turned back four others, reports that could not be independently confirmed.
Monday’s reversal came on Trump holding off a fresh attack in pursuit of a quick deal to halt Tehran’s nuclear ambitions and reopen the strait, after he said late Saturday that Iran and other Middle Eastern countries had asked for time. Tehran’s framing is considerably more cautious, and that gap is the trade: Iran describes bilateral negotiations with Oman on a temporary route, calls an Omani understanding necessary but not sufficient, and says there will be no significant change while the US naval blockade and military action continue.
The give-back was faster in Brent, which fell $6.66 (−6.9%) to $90.12 and compressed the Brent–WTI spread from $7.47 to $5.45, and to roughly $3.5 Monday. That is a war-risk premium unwinding rather than a demand story — the premium sat in the waterborne benchmark, so that is where it left from. Worth keeping in perspective: both contracts still gained more than 20% over the month of July.
Chokepoints & Flows
The Physical Disruption Has Not Eased — Only the Price of It
This is the disconnect worth carrying into this week. Flat price has round-tripped a war premium twice in five sessions, but the flow data underneath has barely improved. Hormuz outbound oil is running near 3 MMb/d against a post-MOU high of 15 MMb/d, and Kpler’s read is that prices are trading headlines rather than flows.
Traffic Stays Choked
The 10-day rolling average held below 10 vessels in both directions all week — the lowest sustained reading since mid-May. Outbound oil flow is down to roughly 3 MMb/d from a post-MOU high of 15 MMb/d. Inbound ballast flow has collapsed below 2 MMb/d and fresh loadings below 4 MMb/d.
Ship-to-Ship Picks Up
At least seven pairs of vessels were transferring cargo near Sohar on Thursday, against two pairs on Jul 21. Buyers of Gulf crude — mainly ADNOC offshore grades — are finally receiving cargoes delayed by weeks, some paying fees on ships hired to collect them.
Bab el-Mandeb Down a Third
Houthi attacks on Saudi ships have cut total crossings roughly 35% and more than halved confirmed Saudi flows to below 2 MMb/d. Suez re-routes hit an all-time high above 1.3 MMb/d, about double normal — but a drone set two vessels alight at Damietta, putting that relief valve in question.
Abqaiq Flaring
The Houthis claimed attacks on Yanbu, the Jizan refinery (reportedly offline) and East-West Pipeline infrastructure. Satellite imagery appears to show damage and heavy flaring at Abqaiq — the single most important crude processing facility in the world.
Range-Bound Near $110 Brent
Kpler notes crossings briefly rebounded Jul 28–29, including the first Qatari LNG carrier out of the Gulf in weeks, but failed to hold Jul 30. Their call: range-bound, capped near $110 Brent so long as China stays out as a marginal buyer. Chinese imports are near 7 MMb/d against roughly 11 MMb/d pre-conflict.
188 kb/d From September
OPEC+ approved a 188,000 bbl/d quota increase effective September — supply returning into a market that just gave back 5%. Both benchmarks still gained more than 20% over the month of July.
Volgograd Refinery Hit
Ukrainian forces struck Lukoil’s 300,000 bbl/d Volgograd refinery, resuming attacks on Russian refining after several weeks focused on tankers in the Sea of Azov and Black Sea. Russia extended its gasoline and diesel export ban to year end.
Tehran Is Framing It Differently
Trump says Iran and others asked for time to complete a deal delivering the “immediate, complete and total” reopening of the strait. Tehran describes bilateral talks with Oman on a temporary route, calls an Omani understanding necessary but not sufficient, and says nothing changes while the US blockade and strikes continue.
Supply & Inventories
Stocks at a 2018 Low, but Demand Is the Weaker Half of the Story
- US commercial crude fell more than 7 MMb to 404.5 MMb — the lowest since 2018, and 37.2 MMb below the May 22 level. We checked this against EIA’s full weekly history back to 1982: the last week at or below 404.5 MMb was Sep 28, 2018. Cushing is down to 18.6 MMb.
- The SPR fell for an eighteenth straight week, to its lowest since 1983. More than 700 MMb remains in commercial and strategic storage combined, so the significance lies in the shrinking margin of safety rather than absolute availability.
- May output slipped about 2% from April’s record to 13.71 MMb/d, while exports set a record 5.73 MMb/d, a second consecutive monthly high. The rig count rose to 588, a sixth increase in seven weeks.
- The bearish half: total US petroleum demand fell more than 3.5% to 20.07 MMb/d, the lowest since March 2025, with distillate demand the weakest since June 2020. Tight crude stocks alongside collapsing product demand is a refining-margin story, not a crude-bull story.
- OPEC+ approved a 188,000 bbl/d quota increase from September — supply returning into that.
Section 02 · Canadian Differentials
July Spot Held Its Premium While WTI Fell — the Cleanest Signal of the Week
July spot differentials pulled back from the prior week’s highs, following the WTI prompt lower, but nowhere near as severely as WTI itself. Condensates corrected most, sweets held the upper end of their range, and heavies drifted in a narrow band.
In July, C5-PCE NAM opened as high as +$7.30 before easing materially to settle near +$3.40. C5-FSPL traced a similar arc — +$4.00 early, weakening to roughly −$0.10 midweek, then improving toward +$2.00, leaving FSPL about $1.40 under C5-PCE NAM by week’s end, wider than the usual $0.60. Medium sours saw scattered activity, PSO around +$7.00 and CAL settling +$4.50 Friday. Heavies were range-bound: WCS opened −$10.50, improved toward −$9.80 midweek and returned to −$10.50, staying above the −$12.10 index throughout. In sweets, PCE traded as high as +$8.00 before easing to +$7.40, and PEM settled near +$6.00.
August activity was extremely thin. C5-FSPL was the lone condensate to print, trading +$0.50 and holding roughly $3.00 above its −$2.50 index. Sweets traded between −$0.30 and −$0.10, effectively flat and well above the −$3.10 index. SYN traded +$4.20 against a +$2.10 index, the firmest grade on the board for the month.
The more consequential development for August is what the WTI sell-off does to July’s nomination/delivery imbalances. In previous weeks we noted producer shorts would be penalized heavily by buyers given contango in the July–August CMA rolls, where a higher August price makes covering expensive. With WTI selling off, those penalties could be much smaller or non-existent. There is another week and a half of trading before we have clarity, and the outcome is binary: if pricing rips again, buying back becomes expensive and penalties reassert themselves; continued weakness renders the cost of covering negligible.
September trading begins this week. Financial sweets, which had improved to around +$2.30, weakened to +$0.10 to WTI on the sell-off. Financial condensates held up better, trading +$1.00. Financial WCS had a few trades and weakened to −$14.30 from −$13.90. On heavies, the time-spread effect we have been tracking — where a backwardated WTI pressures WCS because barrels take longer to reach the USGC, so weaker forward pricing weighs on prompt — will not bite as hard in a world where WTI stays softer. That said, WTI remains headline driven, and another jump is as plausible as a collapse.
| Grade | Julindex | Augindex | SepJul 24 | SepJul 31 | Δ wk |
|---|---|---|---|---|---|
| SYN | +$3.83 | +$2.08 | +$9.00 | +$7.70 | -$1.30 |
| MSY | -$1.75 | -$1.75 | +$2.35 | +$1.85 | -$0.50 |
| MSW | -$1.65 | -$3.08 | +$2.05 | +$1.55 | -$0.50 |
| C5 | -$7.14 | -$3.09 | +$0.80 | +$0.90 | +$0.10 |
| LLB | -$12.01 | -$14.18 | -$13.85 | -$14.10 | -$0.25 |
| WCS | -$12.06 | -$14.23 | -$14.00 | -$14.25 | -$0.25 |
In other news: Enbridge is postponing the 250,000 bbl/d second phase of its Mainline expansion, citing a lack of binding commitments from Canadian producers, and will prioritize the 100,000 bbl/d Flanagan South and 50,000 bbl/d Southern Access Extension projects instead. Management does not expect meaningful oil sands growth or FID-ready commitments until federal and Alberta policy changes are enshrined in law — a notably harder line than the general producer optimism about egress we have heard this year.
Section 03 · Natural Gas
Record Alberta Demand Meets a Shut LNG Outlet
AECO held near the prior week’s levels, with AECO 5A settling $1.50 CAD/GJ over the long weekend, little changed from $1.51 a week earlier. Temperatures across the province held above 30°C for much of the week, lifting intraprovincial demand to an all-time high for this point in the season at more than 6 Bcf/d on supportive oil sands load and stronger residential and commercial cooling.
The same heat appears to have worked against supply: NGTL field receipts fell back below their five-year seasonal highs, likely on gas compression issues in hot weather. Storage sits roughly 20 Bcf below the 2024 and 2025 highs but remains elevated. The province still faces supply pressure because Willow Valley (LNG Canada) deliveries remain low following planned maintenance, keeping that outlet for Alberta gas largely shut.
Two producer-side items sharpen the picture. Tourmaline is scaling back Canadian upstream activity as Western Canadian prices stay persistently suppressed. And LNG Canada set a record: Kitimat intake averaged 1.78 Bcf/d in June, above April’s 1.70 — though July is estimated to fall to 1.2 Bcf/d on flare replacement and other onsite maintenance, with no completion timeline provided. That last point is the one to watch; it is the difference between a soft summer and a structurally short outlet.
AECO 7A forward curve · Jul 30 strip
| Period | AECO 7ACAD/GJ | Δ wk |
|---|---|---|
| Q3-26 | $1.542 | +$0.01 |
| Q4-26 | $2.105 | +$0.01 |
| Bal Gas Year 26 | $1.601 | +$0.02 |
| Summer-26 | $1.527 | +$0.01 |
| Winter-26/27 | $2.377 | -$0.01 |
| Cal-27 | $2.239 | -$0.01 |
| Gas Year-27 | $2.172 | -$0.01 |
| Summer-27 | $2.025 | -$0.01 |
| Winter-27/28 | $2.785 | -$0.02 |
Henry Hub Bal-26 · Jul 24 vs Jul 30
Henry Hub Softer on the Week, but Probing Higher Into Friday
Henry Hub opened Monday at $2.82 and closed $2.747 Friday, though prompt futures were probing higher into the final session on bullish storage data and an impressive two-week heat forecast. Storage drew across the South Central and West regions as extreme heat gripped major markets.
LNG feedgas averaged 17.6 Bcf/d, up 0.32 Bcf/d week over week, with most terminals at or near full capacity. Freeport remains the exception, where planned maintenance plus a series of unplanned outages has suppressed intake through the month. Demand was largely unaffected by Hurricane Bertha, which made landfall in Louisiana on Jul 22 before moving into Texas.
Supply has been drifting the other way. EIA monthly data show gross production surprisingly easing to 134.0 Bcf/d in May from 135.3 in April, still short of December’s record 136.0, as Texas output slipped and Pennsylvania rose modestly. Feedgas supply is softening on the US Gulf Coast and in Mexico for the same reason as in Alberta — extreme heat domes causing compression and infrastructure issues that make gas harder to produce. That is a genuinely continent-wide pattern this summer, and it cuts both ways: heat lifts cooling demand and hurts supply at once.
Rolling Three-Month Price Details
From the emailed workbook, stale-dated to the Jul 30 strip. Spot columns are the traded spot differential; index columns are the monthly index.
| Month | FX | WTI CMA | WCSindex | WCSspot | C5index | C5spot | MSWindex | MSWspot | AECO 7ACAD/GJ | AECO 5ACAD/GJ | NYMEX NG |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Jun-26 | 1.4041 | 81.79 | -15.88 | — | 2.41 | — | 1.79 | — | 1.539 | 1.744 | 3.040 |
| Jul-26 | 1.4003 | 79.17 | -12.06 | -10.50 | -7.02 | 1.05 | -1.65 | 6.00 | 1.648 | 1.560 | 3.231 |
| Aug-26 | 1.3996 | 82.66 | -14.23 | -14.00 | -3.09 | 0.25 | -3.08 | -0.25 | 1.492 | — | 2.725 |
Desk Angles
Two Round Trips, No Direction
WTI has now given back a rally twice in five sessions. The market is pricing headlines, not barrels — and every geopolitical bid has been sold within days. Until flow data confirms a move, treat spikes as sellable and dips as covered rather than owned.
Flows Say Nothing Improved
Hormuz outbound is ~3 MMb/d against a 15 MMb/d high; Bab el-Mandeb is down a third. Price has round-tripped; physical has not. If the Oman track stalls, there is very little disruption actually priced in right now.
Local Tightness Is Real
July sweets holding +$8.00 against a flat CMA roll is the strongest evidence we have that local supply is short of demand. Thin liquidity overstates it, but it should not be dismissed as noise — it argues for holding bids on prompt sweet barrels.
The Penalty Question Is Now Live
A softer WTI could void the buyer penalties on producer shorts we flagged in prior weeks. Binary, and roughly a week and a half to clarity. Worth a call to anyone carrying a July short before pricing moves again.
The Bearish Half Is Being Underweighted
Total US petroleum demand at 20.07 MMb/d is the lowest since March 2025, with distillate weakest since June 2020. Tight crude plus weak products is a margin story. That is the number to raise if the desk gets too bullish on the 2018 inventory headline.
Watch Kitimat, Not the Strip
Record Alberta demand and field-receipt weakness are both bullish; the strip fell anyway because the LNG Canada outlet is shut with no restart date. A completion timeline is worth more to the September view than any storage number.