Uncertainty keeps oil markets on edge
October 7, 2026
The API inventory report showed crude oil supplies down 2.09 million barrels, gasoline supplies down 1.37 million barrels and distillate supplies up 461,000 barrels.
The average estimates for today’s DOE inventory report, according to the Bloomberg survey, are for crude oil supplies to increase 1.802 million barrels, gasoline supplies to decrease 1.008 million barrels and distillate supplies to decrease 1.584 million barrels.
The European Union has not been very urgent in explaining how or when it will release barrels from its strategic reserve. There is a lot of confusion surrounding the release, similar to the confusion created by the Trump administration’s executive order on dyed diesel. Markets do not like uncertainty, and this is adding to the number of issues the market has to digest. We can expect continued high volatility because of all this uncertainty.
Over the last five years, U.S. propane inventories have averaged a build of just 21,000 barrels during this reporting week.
In its Short-Term Energy Outlook, the EIA said Brent crude oil is now expected to average about $98 per barrel in 2026, up 8% from its previous forecast. Brent is forecast to average about $105 per barrel in the fourth quarter, $14 above the EIA’s previous estimate. U.S. retail diesel prices are expected to remain above $6 per gallon in October before gradually easing to an average of roughly $4.50 per gallon in 2027.
Bloomberg reported that Iran has increased the pace of attacks on tankers in the Strait of Hormuz in recent days. The UK Maritime Trade Operations has reported nine attacks in the waterway this month, half the total it reported for all of September in the Strait of Hormuz and Persian Gulf combined.
Chevron CEO Mike Wirth said the energy system is more fragile today than earlier in the U.S.-Israeli war, while the floor for oil prices continues to rise as buffers for oil and fuel supplies thin. He added that the landed price of physical oil in Asia is currently closer to $150 per barrel than $100 per barrel.