Internal Market Brief

CONTANGOCOMMODITY MARKETING INC.

Print / PDF

INTERNAL MARKET BRIEFWEEK OF JUL 6 – 10, 2026

Published July 13, 2026Contango Commodity Marketing Inc.

Crude & Positioning

WTI

WTI prompt (Fri)$71.41+$2.69 wk

This morning$73.90+3.5% — Hormuz closed

Weekly high (Wed)$73.52biggest wk gain since mid-May

WTI CMA Bal-26$70.83$68.47 Mon → Fri

Managed moneynet sellers2nd wk; spec length lowest of 2026

Hormuz outbound~11 MMb/dfrom ~15 late-Jun; 18 transits Thu

Supply & Inventories

EIA

US commercial crude411.4 MMb+3.0 MMb — first build since mid-Apr

SPR−6.2 MMblowest since 1983

Diesel stocks−5.0 MMbRussia export ban thru Jul 31

Gasoline stocks−1.9 MMbdraw

Headline (comm.+SPR)−4.0 MMb

US working gas2,983 Bcf+61 Bcf vs ~49 est.

Settlements for the week ended July 10, 2026. Prices in USD/bbl unless noted; deltas are week-on-week. CMA marks from the Contango price file (2026-07-10).

Section 01 · Crude Oil

WTI — War Premium Returns as the Ceasefire Collapses

WTI climbed steadily through midweek, rising from $68.43 USD/bbl at Monday’s open to a weekly high of $73.52 by Wednesday’s close before slipping to settle near $71.41 Friday — the market’s largest weekly gain since mid-May, as renewed attacks around the Strait of Hormuz unravelled the fragile US–Iran memorandum of understanding.

Update
weekend

Saturday brought the sharpest escalation yet: Iran’s Revolutionary Guard navy declared Hormuz closed until further notice after striking a Cyprus-flagged container ship, the US launched fresh strikes and new Treasury sanctions, and the USS Abraham Lincoln re-entered the Gulf of Oman within missile range of Iran’s coast. Iranian officials travelled to Oman for transit talks, but Tehran rules out formal negotiations until sanctions are reversed. WTI is up 3.5% this morning at $73.90.

• Mon open $68.43 → Wed high $73.52 → Fri ~$71.41; largest weekly gain since mid-May. $73.90 this morning.
• Tue: Iran attacks three tankers (Saudi VLCC, Qatari LNG carrier); JMIC threat level to severe; US revokes the Iran oil-sales license.
• Wed–Thu: US strikes Iranian military targets; Iran counters in Kuwait, Bahrain, Qatar, Jordan.
• Transits at an MOU-low 18 Thu; outbound ~11 MMb/d (from ~15) — mostly cleared backlog; oil on water back to pre-war levels.
• Money managers net sellers a 2nd week; net spec exposure lowest of 2026 — structurally bullish positioning.
• Brent briefly returned to prompt backwardation Wednesday before rolling back into modest contango.

WTI Daily Marks — Week of Jul 6 – 10, 2026

WTI CMA (Jul-26), USD/bbl · Climbed from $68.56 Mon to $72.62 Wed on the ceasefire collapse, easing to $71.08 Fri (prompt settled ~$71.41) · trading $73.90 this morning with Hormuz declared closed

Mon: opens $68.43 and marks $68.56 — a quiet start in the shadow of the OPEC+ August hike · Tue: Iran attacks three tankers (a Saudi VLCC, a Qatari LNG carrier); JMIC raises Hormuz threat to severe — crude jumps ~5% to a two-week high as the US revokes the Iran oil-sales license · Wed: US launches retaliatory strikes on Iranian military targets — the week’s peak, with the prompt touching $73.52 by the close · Thu: Iran counters at US-linked sites in Kuwait, Bahrain, Qatar and Jordan; Hormuz transits fall to an MOU-low 18 — but the first US crude build since mid-April tempers the rally · Fri: eases as cleared-backlog barrels and soft Chinese demand weigh; prompt settles near $71.41 into the weekend’s escalation

Fig 1WTI daily marks with key catalystsSource: Contango price file (2026-07-10), weekly commentary

Fig 2Outbound Hormuz transits collapse after the Jul 7 tanker attacks (ships/day)Source: Commodity Context, Kpler

Domestic: First Crude Build Since Mid-April, but the SPR Keeps Draining

• Commercial crude +3.0 MMb to 411.4 MMb — first build since mid-April; analysts flag a flattening WTI curve as easing prompt tightness.
• SPR −6.2 MMb — lowest since 1983; a multi-year government refill bid is building underneath the market.
• Diesel −5.0 MMb, gasoline −1.9 MMb; headline (comm.+SPR) −4.0 MMb.
• Russia’s diesel ban (≥ Jul 31) + refinery strikes keep middle distillates the tightest part of the barrel.

Fig 3US commercial crude — first build since mid-April interrupts the slide below the 5-yr bandSource: EIA weekly data

Total gasoline (thousand bbl)

Distillate fuel oil (thousand bbl)

Fig 4Products keep drawing: gasoline below the 5-yr band, distillates well under averageSource: EIA weekly data

Desk angles

POSITIONING

Shorts Met a Closed Strait

Money managers sold crude a second straight week and net spec exposure hit its 2026 low — right before the IRGC declared Hormuz shut. Structurally bullish: the marginal flow is short-covering, and this morning’s +3.5% is orderly, not panicked.

FLOWS

Backlog, Not Blockage — Yet

Thursday’s 18 transits and ~11 MMb/d outbound mostly reflect cleared backlog, with oil on water back at pre-war levels. If the closure declaration holds this week, the next leg is a genuine supply gap, not a paper one.

STRUCTURE

Curve Confirms the Tension

Brent flashed prompt backwardation Wednesday then rolled back to modest contango — a war premium fighting a glut. A sustained Hormuz halt flips the front hard; a de-escalation leaves the contango carry trade in charge.

CANADA

Diffs Tighten on Supply Fear

August condensates and lights tightened steadily as Hormuz risk injected supply concern — C5-PCE NAM to −$3.30, SYN to +$2.15 — while August WCS firmed from −$15.25 toward −$14.25 as turnaround barrels returned.

Desk
view

Bias: buy dips while Hormuz is declared closed and spec length is this thin — but respect the backlog math; the physical gap only opens if the halt persists. Levels: $68.43 Mon open · $73.52 Wed high · ~$71.41 Fri settle · $73.90 this morning. Producers: the week validated patience on August hedges — condensates and WCS both tightened; use spikes toward $75+ to layer in. Watch: whether transits stay halted, the Oman talks, SPR-refill headlines, and record-tight distillates.

Risk scenarios — WTI path (closure vs backlog math)

Scenario	Trigger	WTI path
Bull / closure holds	IRGC enforcement persists; transits stay near zero; a real supply gap opens	$80+ as the premium reprices
Base / managed strait	Sporadic transits under Iranian control; Oman talks grind; backlog cushions	$70–76, headline-driven chop
Bear / de-escalation	Talks reopen the strait; glut math reasserts with spec length rebuilt	Back toward $65–68

Storylines

ESCALATION

US and Iran Trade Strikes; Hormuz Declared Closed

Iran’s Revolutionary Guard navy declared the Strait of Hormuz closed until further notice Saturday after Iranian forces struck a Cyprus-flagged container ship, leaving a crew member missing and the vessel ablaze. The US answered with fresh strikes, a new round of Treasury sanctions, and the USS Abraham Lincoln has re-entered the Gulf of Oman without visible escort — a posture consistent with preparing to reimpose the naval blockade.

FLOWS

Hormuz Traffic Slows Toward a Standstill

Two-way Hormuz transits fell to an MOU-period low of 18 on Thursday and outbound flow eased to roughly 11 MMb/d from a late-June high near 15 MMb/d, as previously loaded ships cleared the strait and ballast tankers slowed entering the Gulf. Qatar paused efforts to ramp production at Ras Laffan amid the uncertainty.

SPR

US SPR Falls to Its Lowest Since 1983

The SPR drew another 6.2 MMb this week and now sits at its lowest level since 1983. Governments are expected to spend years rebuilding reserves drawn down during the conflict — with China, India and the Philippines also expanding strategic capacity — a structural demand add against an expected surplus.

INFRASTRUCTURE

The Hormuz Bypass Race Is On

Reuters reports Saudi Arabia is weighing an expansion of its East–West pipeline to the Red Sea, while Israel’s energy minister touted an oil line bypassing the strait entirely. Rerouting infrastructure is becoming the war’s structural legacy — and a long-run bearish input for the Hormuz risk premium.

BALANCES

EIA Sees Pre-War Flows Restored by 2027

The EIA’s STEO projects global oil output and trade flows return to pre-war levels by 2027; the UAE pumped a record in June as Abu Dhabi moved most aggressively to offset the disruption. China granted refiners more fuel-export permits, relaxing wartime restrictions.

PRODUCTS

Diesel Tightens: Russian Ban Plus Refinery Strikes

Russia confirmed its diesel-export ban through at least July 31 as Ukraine struck two more refineries — including Russia’s largest, which halted processing — and over a dozen fuel tankers. US diesel drew another 5.0 MMb; middle-distillate balances remain the tightest part of the barrel across the US, Singapore and Europe.

Section 02 · Western Canada

Canadian Differentials — Condensates Tighten, August WCS Firms Off the Lows

July condensates, SYN and lights tightened further into a thin, Stampede-quieted market, while heavies loosened modestly from late-June trading but held healthy near −$12.00 (−$12.06 index). August traded tighter across every stream as Hormuz escalation injected fresh supply concern — and WCS firmed from its −$15.25 open toward −$14.25.

• July: C5-PCE NAM −$4.50 → −$3.30; C5-FSPL → −$3.30/−$3.50; C5-CRW −$4.50 → −$2.90 → −$3.50.
• July sweets/SYN firm: PCE −$0.15 → +$0.25; PEM +$0.25; SYN $4.00 → $6.00 → $5.00. Heavies: WCS/CHV single prints at −$12.00 (index −$12.06).
• August tightened across the board on Hormuz risk: C5-PCE NAM → −$3.30; C5-FSPL → −$1.80; C5-CRW → −$2.10; SYN +$0.05 → +$2.15 (largest move).
• August sours: PCE/PEM → −$3.40; LSB → −$6.10; CAL ~−$6.50; MID −$7.50 (light volume).
• August WCS firmed −$15.25 → −$14.25 (wtd-avg −$14.23 Fri); July softness = returning turnaround barrels. Liquidity thin — Stampede.

Fig 5WCS trade data — July cycle holds ~−$12, August opens wide then firms to −$14.23 (USD/bbl)Source: Contango Commodity Marketing

Fig 6C5-PCE NAM daily weighted-avg — July tightens −$4.50 → −$3.30; August follows to −$3.30 (USD/bbl)Source: Contango Commodity Marketing

August cycle — latest prints vs cycle open (USD/bbl vs WTI)

Grade	Cycle open	Latest	Note
C5-PCE NAM (diluent)	−$4.15	−$3.30	tightened with Hormuz risk
C5-FSPL	−$3.00	−$1.80	most pronounced condensate move
C5-CRW	−$4.00	−$2.10	two late single-day moves
SYN	+$0.05	+$2.15	outsized vs the complex
PCE / PEM (sweet)	−$4.20	−$3.40	in step with condensates
LSB (sour)	−$6.40	−$6.10	PSO −$6.40/−$6.70; CAL ~−$6.50; MID −$7.50
WCS (heavy)	−$15.25	−$14.25	index; wtd-avg −$14.23 Fri

Tbl 1August cycle prints (to Fri Jul 10)Source: Contango Commodity Marketing

Storylines

PIPELINE

Trans Mountain Strikes Tolls Deal

Trans Mountain reached a toll settlement with shippers after prolonged negotiations, ending the standoff over the expanded line’s cost

Danielle Kenny