Crude extends rally as Hormuz supply risks increase
The WTI prompt-month contract rose $2.19 to $87.95/Bbl Tuesday morning (7:30 AM CT)
Crude futures moved higher as two oil supertankers were reportedly struck by projectiles while attempting to exit the Strait of Hormuz
The tanker attacks followed a renewed escalation between the US and Iran over the weekend, with US forces striking an island in the strait before Iran retaliated with attacks on the UAE and Jordan
CENTCOM has maintained a limited but relatively steady flow of maritime traffic through the strait, primarily consisting of crude shipments, while clearing Iranian mines and enforcing the naval blockade
The latest exchange of US and Iranian strikes now threatens the fragile shipping recovery and raises the risk of further disruptions to regional crude exports
Bloomberg data indicate that Hormuz crossings have declined recently, with outside estimates suggesting only 2–4 MMBbl/d is passing through the waterway compared with the US administration’s estimate of 8–10 MMBbl/d
The Bal 2026 strip is trading near $84.05/Bbl, while the Cal 2027 strip is trading around $73.70/Bbl (8:20 AM CT)
Gas falls on cooling in the Western L48
Natural gas is down -6.2c to $2.873/MMBtu (As of 07:30 AM CDT)
Overall L48 forecast shifts were mild day over day, with the West and Rockies regions more than offsetting gains across the Midwest and Southeast
The L48 lost roughly 4°F across the forecast range this morning
Average forecast range daily temperatures regulated a bit, but are still expected to start September hotter than the 10-year normal (Criterion)
Tropical Storm Edouard to make landfall this evening
The storm is headed towards the Texas Louisiana border, its path is a direct hit for Sabine Pass, Golden Pass, and the under-construction Port Arthur facility
The storm doesn’t pose much risk in the way of Power loss and wind
Sabine and Golden Pass have onsite power generation, while freeport and Cameron are the gulf terminals exposed to outside grid failures
LNG facilities should be able to withstand winds up to 150+ Mph, but loadings may be temporarily impacted
The storm may pose some risk to the surrounding infrastructure and channel obstructions
While the storm isn’t expected to be powerful enough to cause medium to long-term damage, some short-term demand loss is possible
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