Internal Market Brief
Crude & Positioning
WTISupply & Inventories
EIAWeek of July 20–24, 2026 (commentary dated July 27). Prices in USD/bbl unless noted; deltas are week-on-week. Charts digitized from the weekly commentary and Contango price file.
Section 01 · Crude Oil
WTI — +6.5% on the Red Sea Blockade, Then Gives It Back on Monday’s Open
WTI opened Monday at $83.76 USD/bbl and settled Friday at $89.31, a gain of roughly 6.5%, after ripping to a Thursday high of $92.19 as Brent briefly traded above $100 for the first time since May. The rally was driven by a second maritime front — a Houthi blockade of Saudi Arabia in the Red Sea — and a Kazakh supply outage. This morning it is back near $83.15, having surrendered almost the entire move.
this morning
WTI has lost nearly all of last week’s gains, trading ~$83.15 on reports that Kazakh oil exports have resumed and on de-escalation rhetoric from the US and Iran. Attacks from the Houthis, Iran and the US all eased over the weekend — a tentative sign of restraint the market will want to see hold. Any resumption of strikes on tankers or export infrastructure would quickly revive the war-risk premium that came out of Friday’s close.
- Opened $83.76 Mon → $92.19 Thu high → $89.31 Fri close; +6.5% week — Brent briefly above $100, first since May.
- Yemen’s Houthis declared a naval blockade of Saudi Arabia and struck two Saudi-owned tankers, threatening the ~5 MMb/d East-West Pipeline route to Yanbu.
- Kazakhstan’s output fell to 1.63 MMb/d (from 2.07) after a drone strike shut the CPC Black Sea terminal; Tengiz more than halved to ~406 kb/d.
- Rerouting via Suez/SUMED is no clean fix: 2.3–2.5 MMb/d nameplate can’t absorb displaced Yanbu volumes, and transit times triple.
Domestic: Physical Still Tight; Cracks Ease but Stay at Highs
- Commercial crude +2.0 MMb to 411.7 MMb (6% below the 5-yr average); a propane/NGL build drove a +11.6 MMb total petroleum build; SPR drew 5.1 MMb.
- Refineries ran 96.1% utilization (17.1 MMb/d); crude imports rose 117 kb/d to 5.8 MMb/d even as the 4-week average stayed 11% below a year ago.
- Cracks pulled back — diesel −$5, gasoline −$10 on the week — but both remain at all-time seasonal highs.
- US crude exports, down ~50% to ~3 MMb/d, look set to rebound: GS Caltex paid an $18/bbl premium to Oct Dubai for a late-Aug US cargo (from $14).
- Chinese refiners pulled forward ESPO buying — all Aug Kozmino cargoes plus some Sept — narrowing ESPO’s discount to Brent to ~$1 from $3–4.
Desk angles
view
Bias: neutral-to-constructive but headline-driven — the war premium proved fragile, so respect the round-trip. Levels: $83.76 Mon open · $92.19 Thu high · $89.31 Fri close · ~$83.15 this morning. Producers: the CMA roll pulled July diffs sharply positive — balance July nominations and use spikes to layer August hedges. Watch: whether the Pakistan/Iran channel reopens US talks, the pace of strikes across both maritime fronts, and Kazakh export recovery.
| Scenario | Trigger | WTI path |
|---|---|---|
| Bull / re-escalation | Strikes resume; Bab el-Mandeb closed on top of Hormuz risk | Back toward $92–100 |
| Base / uneasy pause | Weekend restraint holds; talks explored but no deal; Kazakh flows patchy | $83–89, headline chop |
| Bear / de-escalation | US–Iran talks advance; Kazakh & Red Sea flows normalize | Toward $78–82 |
Storylines
Section 02 · Western Canada
Canadian Differentials — July Condensates & Sweets Rip on the CMA Roll
July differentials moved sharply higher this week, driven primarily by the widening WTI calendar-month-average (CMA) roll rather than grade fundamentals. Because producers are paid off CMA and roughly two-thirds of July has already settled at lower levels, the July CMA can’t chase headline WTI — so the fully-open August strip captured the move, and the July–August gap widened from ~$2 on Jul 13 to ~$10 by Friday.
- July–August CMA roll widened to ~$10 (July ~$80.50 vs Aug ~$90.50); the diff has to lift to keep a July barrel equivalent to an August one.
- C5-PCE NAM tightened from ~+$2 to +$10; C5-FSPL to +$9.50 (FSPL ~$0.60 tighter than PCE NAM).
- Sweets PCE/PEM converged near +$9.40 from a +$5–7.50 range; SYN printed +$13 (single trade Thu).
- Medium sours: CAL +$2.80 → settled ~+$6.50; PSO +$4 → +$8.50; MID printed +$10 (single). WCS improved to −$6.80 on light volume.
August & September: The Roll Cuts the Other Way
- August lagged: C5-PCE NAM −$3 → −$2; C5-FSPL to flat WTI midweek; SYN held ~+$5; WCS at −$14.20 Fri.
- September taking shape: financial sweets −$2.10 → +$2.25; financial C5 Edmonton −$1.00 → +$1.25; WCS −$14.15 → ~−$13.90.
- Heavies watch: WCS is marked against a later point on the curve than lighter grades — sustained backwardation could re-widen the light/medium-vs-heavy gap (as in June, WCS as wide as −$15.88).
- Turnarounds: six Alberta refining/upgrader events (late Aug–mid Oct) remove ~420,500 bpd; ~200,000 bpd of upgrading offline (Mildred Lake, Horizon) leaves more bitumen in the heavy system.
note
Given the run in July diffs, push out as much inventory as possible to meet July nominations — lease buyers will pass back penalties on short imbalances, so deliveries must be balanced to nominations as we exit the month. Should the strait remain closed and escalation continue, diffs should stay tight relative to index; upgrader outages are a September story, but Middle East risk will remain the key driver.
Section 03 · Natural Gas — WCSB
AECO Eases Further as Egress Constraints and High Field Receipts Weigh
Alberta gas extended its pullback from early-month highs, settling the weekend at $1.51 CAD/GJ after trading as high as $1.83 earlier in July. The decline reflects downward pressure from several directions at once — a delivery cut at West Gate, reduced Willow Valley pulls, and field receipts near five-year seasonal highs.
- AECO softened from a $1.83 high into a $1.40–1.50 range, weekend $1.51 CAD/GJ.
- West Gate: Burton Creek Compressor maintenance took the AB–BC border to 0% IT-D (partial FT-D) since Jul 19; NGTL-to-West-Gate deliveries fell ~0.1 Bcf/d (2.5 → 2.4).
- Willow Valley pulls fell from ~0.3 Bcf/d to zero on LNG Canada maintenance, removing another outlet for Alberta gas.
- NGTL field receipts near five-year seasonal highs; intraprovincial demand above normal on oil-sands use and above-seasonal heat.
view
The bearish mix is mostly egress, not demand: West Gate and Willow Valley outages trap supply behind constrained pipes while field receipts run hot. Watch the West Gate restriction’s duration and LNG Canada’s maintenance return — both are the swing factors for AECO into month-end.
Storylines
Section 04 · Natural Gas — U.S.
Henry Hub Stays Soft as International Gas Firms on Qatari Force Majeure
NYMEX prompt prices stayed soft this week despite strong short-term demand from an intensifying Western heat wave, with August futures settling at $2.87 USD/MMBtu Friday as traders weighed regional demand against robust production and ample supply. That domestic softness stands in sharp contrast to firming global prices.
- August futures traded sideways, dipping into Friday to settle $2.87 USD/MMBtu; Western heat lifted West cash Wed, offsetting modest Eastern declines.
- A Thursday afternoon operational trip at Freeport LNG added volatility to feedgas nominations, though gains elsewhere kept national feedgas demand rising.
- QatarEnergy extended force majeure on LNG to Asian customers through mid-October after the renewed Hormuz closure — a planned restart was shelved once fighting resumed.
- The extended Qatari outage sets up a Europe-vs-Asia race for replacement LNG, with both regions competing for the same curtailed volumes.