The Perimeter

Energy Desk · Weekly recap

Crude's biggest week of the year, and an inventory build that argues against it

Week of July 20–24, 2026 · Published Monday, July 27

The week in one line

Crude posted its largest weekly gain of the year as attacks on Red Sea shipping reopened a second front in the Middle East conflict — then gave back roughly a third of it on Friday.

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Crude

September WTI traded at $92.31 late Thursday, up $10.54, or 12.89%, on the week. Brent broke back above $100 a barrel on Thursday for the first time in nearly two months before retreating roughly 4% on Friday to settle near $97 — its steepest single-session decline since late June. Even after that reversal, Brent finished the week up more than 12%.

The move was geopolitical, not fundamental. Iran-backed Houthi militants struck two Saudi oil tankers in the Red Sea — an export route that had been serving as the alternative to a disrupted Strait of Hormuz. U.S. strikes on Iran ran a thirteenth consecutive day, with both sides ruling out near-term talks. President Trump said he was weighing a large-scale attack and threatened retaliation over any further attacks on Red Sea shipping.

Friday's pullback reflected a simple observation: oil is still moving. Despite the escalation, cargoes continued to traverse the region, and traders repriced the disruption premium accordingly.

In simple terms: the market spent four days pricing in a supply shock that has not yet materialized, then spent Friday partially un-pricing it.

Inventories and drilling

U.S. commercial crude inventories, excluding the Strategic Petroleum Reserve, rose 2.0 million barrels in the week ending July 17 to 411.7 million barrels — approximately 6% below the five-year average for the period. Refinery inputs averaged 17.1 million barrels per day. The next EIA Weekly Petroleum Status Report, covering the week ending July 24, is due Wednesday, July 29.

Baker Hughes reported 587 active U.S. rigs for the week of July 24, down one from 588 and the first national decline in six weeks. Oil-directed rigs fell two to 450; gas rigs rose one to 127; miscellaneous held at 10. Offshore dropped one to 12. The total sits 45 rigs above the 542 counted a year ago.

By state: Texas fell two to 272. New Mexico held at 96, North Dakota at 24, Louisiana at 37, and Oklahoma at 50.

Worth noting: WellDatabase put the U.S. count at 575, up one on the week — a divergence from Baker Hughes that suggests the multi-week addition streak is flattening rather than reversing. Operators appear to be prioritizing efficiency and high-return acreage over fleet growth.

Natural gas

Gas continued to trade its own story. Prompt-month Henry Hub futures managed their first weekly gain since June 18 — but only barely, and in sharp contrast to the November-through-March strip, which posted double-digit gains.

Henry Hub spot settled at $2.80/MMBtu on July 20. The August contract settled at $2.91/MMBtu on July 22, down 8.0% from its first settlement as prompt month on June 29. A run of 30 consecutive trading days above $3/MMBtu ended July 10.

Two supply-side items shaped regional pricing. Kinder Morgan's Natural Gas Pipeline Co. of America took a stretch of its Gulf Coast mainline out of service for the second time this month, halting roughly 500,000 Dth/d of East Texas Haynesville receipts and firming local spot. Meanwhile, Desert Southwest and Southern California prices surged Friday as Phoenix temperatures approached 115°F.

The structural drag remains intact: record production, healthy storage, and strong renewable generation displacing gas-fired power during peak cooling hours.

Equities

The majors have been the cleanest expression of the 2026 crude rally. ExxonMobil is up roughly 31% year to date, Chevron 29%, and BP 27% — gains driven primarily by the commodity rather than by operational outperformance. WTI has traveled from a 2026 high of $114.58 in April to the low $70s earlier this month before last week's rebound, which is a useful reminder of how much of that equity performance is beta to a volatile input.

Chevron reports second-quarter results July 31; ExxonMobil and ConocoPhillips follow in early August.

The week ahead

  • Tuesday–Wednesday: FOMC meeting. Energy-driven inflation is the reason a hike is live at all.
  • Wednesday: EIA Weekly Petroleum Status Report, week ending July 24.
  • Friday: Chevron Q2 earnings; Baker Hughes rig count.
  • Ongoing: Red Sea transit volumes and any movement on U.S.–Iran talks.

Key takeaways

  1. Last week's crude rally was a risk-premium event, not a physical shortage. Inventories built.
  2. The rig count decline is too small to signal a turn, but the six-week streak of gains has stopped.
  3. Natural gas is telling a two-part story — a weak prompt month and a strong winter strip. That spread is where the disagreement lives.
  4. The FOMC decision matters to energy this week, because energy inflation is what put a hike on the table.

Sources: Bloomberg; Reuters; Trading Economics; Oilprice.com; U.S. Energy Information Administration; Baker Hughes; American Gas Association; Natural Gas Intelligence; Energy News Beat; Rigzone.

The Perimeter — Energy Desk is published weekly at PerimeterDesk.com.

This newsletter is published for informational purposes only. It is not investment advice and does not constitute a recommendation to buy or sell any security. No compensation was received from any company mentioned. Consult a licensed financial professional before making investment decisions.