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Crude Climbs as Hormuz, Russia Supply Risks Tighten Markets, EBW Analytics Says

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Crude oil prices surged last week as escalating US-Iran tensions disrupted expectations for stable Middle East supply flows, while fresh risks to Russian energy infrastructure and tighter refined-product markets added further support to prices, EBW Analytics said in a note on Monday.

EBW Analytics strategists said NYMEX front-month crude futures for August delivery settled at $82.49 per barrel July 17, gaining $11.08 or 15.5%, from the previous week.

The analysts said the rally reflected mounting concerns that crude exports via the Strait of Hormuz could remain constrained as geopolitical tensions intensify, with some tanker traffic relying on nighttime movements to avoid disruption risks.

Market participants are now watching whether physical cargo flows can normalize. EBW expects the September 2026 crude contract to trade within a $78.50 to $87.50 range over the next seven to 10 days, with a target price of $84.50/bbl, as traders assess the durability of supply disruption.

However, beyond the immediate horizon, EBW sees prices easing as markets adjust.

The October contract is projected to trade between $64.50 and $79.50 over the next 30 to 45 days, with a target of $73.50, while the November contract is forecast to fall further into a $61.50 to $71.50 range, targeting $69.50, as supply risks potentially fade.

Meanwhile, US crude inventories continued to tighten, with Energy Information Administration data showing total storage at 409.7 million barrels for the week ending July 10, a decline of 1.7 million barrels.

EBW expects the next EIA report to show another draw of between 1 million and 4 million barrels for the week ending July 17, potentially bringing inventories down to 405.7 million to 408.7 million barrels. The analytics firm said that would place stocks roughly 10.3 million to 13.3 million barrels below year-ago levels.

US crude inventories are projected to end July between 400 million and 410 million barrels, reflecting continued market tightening.

The oil market has also been supported by disruptions beyond the Middle East. EBW said increased Ukrainian drone attacks on Russian energy infrastructure, combined with Moscow's temporary restrictions on distillate exports, have pushed refinery margins to record levels, tightening global refined-product markets.

While crude rallied, US natural gas markets remained under pressure as strong production and elevated inventories outweighed seasonal demand support.

The NYMEX front-month August natural gas contract closed at $2.911 per million British thermal units on July 17, down 2.9 cents, or 1%, from the previous week.

EBW analysts forecast the August contract to trade between $2.74 and $2.99/MMBtu over the next seven to 10 days, with a target price of $2.84, as traders monitor production trends in the Permian Basin.

The September contract is projected to trade within a $2.62 to $2.91/MMBtu range, while November prices are expected to find seasonal support, trading between $3.01 and $3.39/MMBtu with a target of $3.19.

Henry Hub spot prices averaged $2.77/MMBtu last week, down 50 cents from the previous week, reflecting weak near-term fundamentals.

US natural gas storage increased by 39 billion cubic feet for the week ending July 10. EBW expects the next storage report to show a 9 Bcf withdrawal, leaving inventories above historical levels.

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