Weekly Oil & Gas Commentary | Week Ending September 18, 2026
Tom Seng, Ed.D. | Ralph Lowe Energy Institute
Oil's rapid rally lost momentum this week as the market reacted to technical signals that prices had moved well above recent averages and to optimism that some disrupted Saudi Arabian supplies could return to market.
WTI still finished higher for the week and traded above $107/bbl at its peak, while Brent ended slightly lower. Natural gas moved higher as extended summer heat and a smaller-than-forecast storage injection provided support.
This Week in Oil & Gas
WTI Crude: $107.75 weekly high | $99.10 weekly low
Brent Crude: $109.80 weekly high | $101.55 weekly low
U.S. Crude Inventories: −0.64 million barrels
U.S. Oil Production: 13.94 million barrels/day
Henry Hub Natural Gas: $2.98 weekly high | $2.85 weekly low
Natural Gas Storage: +44 Bcf
Oil
Fundamental Analysis
Last week's rapid oil rally encountered headwinds as optimism grew over the potential return of some disrupted Saudi Arabian supplies. At the same time, a key technical indicator signaled that crude prices had moved considerably above their recent average.
WTI's high was Tuesday's $107.75/bbl for October, while the low was Friday's $99.10. October Brent crude reached a high of $109.80/bbl and a low of $101.55. WTI finished higher for the week at levels not seen since mid-May, while Brent ended slightly lower than the previous Friday. The WTI/Brent spread tightened to $4.05.
Saudi Arabia continues to assess damage to its East-West pipeline. Although some operations may resume, the kingdom estimates that a return to full capacity could take six to eight weeks, assuming there are no further attacks.
In the meantime, Saudi Arabia is considering ship-to-ship transfers and U.S. Navy escorts to move some oil through the southern portion of the Strait of Hormuz near Oman. The announcement helped put a cap on the rally that began the previous week.
Iranian leadership has reportedly indicated that the Strait of Hormuz will not be fully reopened until President Trump leaves office in January 2029. Tanker-tracking firm Kpler estimated that approximately 10 million barrels per day moved through the Strait this past week, still well below the pre-war level of 17–20 million barrels per day.
Offsetting the reduction in oil supplies, the IEA has lowered its 2026 oil-demand outlook by 2.5 million barrels per day. According to Tom's commentary, that would represent the largest crude demand decline since the 2020 pandemic and the second largest in 60 years.
China's previous stockpiling of oil reserves and continued diversification of its energy portfolio have also helped reduce its need for crude during the Iran War. China has purchased approximately 23% less oil during the conflict to date. Goldman Sachs analysts estimate that this has reduced the impact on global oil prices by approximately $10/bbl. China's expanded refining capacity has also helped moderate refined-product prices.
U.S. Petroleum Snapshot
The Energy Information Administration's Weekly Petroleum Status Report indicated that commercial crude oil inventories decreased 0.64 million barrels to 423.4 million barrels, approximately 1% above the five-year average.
Gasoline inventories increased by 795,000 barrels to 207.7 million barrels and remain 6% below the five-year average. Distillate inventories increased 1.6 million barrels to 108 million barrels and remain 14% below the five-year average.
Refinery utilization declined to 96.8% from 97.8% the previous week, while crude inputs decreased by approximately 260,000 barrels per day to 17.3 million barrels per day.
Gasoline demand increased to 8.8 million barrels per day from 8.6 million barrels per day the previous week. Crude imports increased to 7.1 million barrels per day, while crude exports rose to 4.8 million barrels per day. Refined-product exports declined to 7.6 million barrels per day.
The Strategic Petroleum Reserve declined another 0.2 million barrels to approximately 285 million barrels, its lowest level since 1982. Stocks at Cushing, Oklahoma declined by 340,000 barrels to 21.5 million barrels, or approximately 30% of capacity.
U.S. crude production was 13.94 million barrels per day compared with 13.95 million barrels per day the previous week and 13.5 million barrels per day a year ago.
Continental Resources also announced a memorandum of understanding with PDVSA to develop a major oil block in Venezuela's Orinoco Belt.
Gasoline prices were $4.295 per gallon, while diesel reached another all-time high of $6.055 per gallon compared with $3.705 a year ago. Russia extended its ban on diesel exports as strikes on its refineries continued, adding pressure to global diesel markets and increasing fuel costs for U.S. farmers heading into the harvest season.
The Federal Reserve raised interest rates by 0.25 percentage points this week, its first increase in three years. Tom notes that continued high energy prices could make reductions in inflation measures such as the CPI and PCE more difficult.
Oil – Technical Analysis
October 2026 NYMEX WTI Futures
October WTI NYMEX futures broke above the upper Bollinger Band last week, representing a move approximately two standard deviations above the 20-day moving average. That provided a key signal that the market was overbought and contributed to this week's pullback.
Prices have retreated toward the 8-day moving average but remain above the longer moving averages. Volume is below the recent average at approximately 75,000 contracts as traders shift their attention toward November with the October contract approaching expiration. The Relative Strength Indicator remains overbought at 65.
Resistance: $100.50
Support: $99.10 — Thursday's low
RSI: 65 — Overbought
Oil – Looking Ahead
Uncertainty surrounding Iran and the Strait of Hormuz remains a major factor for crude markets. There appear to have been no diplomatic talks during the past week, while the addition of the Yemen-based Houthis as an ally has strengthened Iran's regional position.
Markets will be watching progress on repairs to Saudi Arabia's East-West pipeline as well as the effectiveness of ship-to-ship transfers in moving additional crude around regional disruptions.
In the U.S., the end of the peak summer demand season is already evident in lower refinery utilization. Diesel production is likely to remain high, however. As fall approaches, sustained high diesel prices could translate into higher heating-oil costs across the Northeast.
Natural Gas
Fundamental Analysis
October NYMEX Henry Hub natural gas futures moved higher this week as extended summer heat and a slightly smaller-than-forecast storage injection provided support.
The week's high was Wednesday's $2.98/MMBtu, while the low was Friday's $2.85.
Natural gas demand this week was estimated at approximately 70 Bcfd amid a large decline in power-generation demand, while supply was estimated at approximately 113 Bcfd.
LNG exports were 18.7 Bcf, while exports to Mexico were 7.3 Bcfd.
International natural gas prices moved somewhat lower. U.K. NBP natural gas was most recently at $26.30/MMBtu, Dutch TTF futures were $25.75/MMBtu and Asia's JKM was quoted at $25.20/MMBtu as Asian and European markets continued competing for LNG shipments.
Qatar was able to move several LNG cargoes through the Strait of Hormuz this week using ship-to-ship transfers.
The EIA's Weekly Natural Gas Storage Report indicated an injection of 44 Bcf compared with a forecast of 49 Bcf and a five-year average of 74 Bcf.
Total natural gas in storage now stands at 3.298 Tcf, 3.6% below last year but 3.7% above the five-year average.
Natural Gas – Technical Analysis
October 2026 NYMEX Henry Hub Futures
October 2026 NYMEX Henry Hub natural gas futures are trading around the 8-, 13- and 20-day moving averages. Volume is approximately in line with the recent average at 145,000 contracts. The RSI is neutral at 52.
Resistance: $3.00
Support: $2.85
RSI: 52 — Neutral
Natural Gas – Looking Ahead
LNG exporter Caturus plans to expand its Commonwealth facility in Cameron Parish, Louisiana, by five new trains after reaching long-term agreements with several buyers.
As September enters its final weeks, temperatures are expected to moderate, although extreme South Texas is forecast to remain above normal.
The natural gas storage surplus relative to the five-year average is shrinking, making continued increases in weekly injections important. Only seven weeks remain in the storage injection cycle.
8–14 Day Temperature Outlook
About Tom Seng
Tom Seng, Ed.D. is Assistant Professor of Professional Practice in Energy at the Ralph Lowe Energy Institute, Neeley School of Business at Texas Christian University. He serves on the PennWell Books Advisory Board and is the author of Energy Trading & Hedging: A Nontechnical Guide , published by PennWell Books.
His Weekly Oil & Gas Commentary examines the fundamental and technical factors affecting crude oil and natural gas markets.
Weekly Oil & Gas Commentary is provided for informational and educational purposes and should not be considered investment, trading or financial advice.