FX.co ★ CL/Crude Oil

The West Texas Intermediate (WTI) trades at around $96.50, 3.6% lower, and is set for the first decline in five sessions. On Friday, the Financial Times noted that Gulf foreign ministers are scheduled to meet the Iranian foreign minister in the Omani town of Salalah to secure support for a deal allowing ships to pass through the Strait of Hormuz. The talks are scheduled for Monday. Friday's news influenced prices. According to preliminary data from the vessel-tracking service, seven ships were passing through the Strait of Hormuz on September 10, compared with eleven on the previous day. Before the war began on February 28, the waterway handled about 125 cargo ships per day and one-fifth of the world's oil shipments and LNG. August CPI increased 0.4% M/M and stood at 3.4% Y/Y, as expected. Gasoline increased by 3.9% and accounted for more than one-third of the increase alone. Energy costs surged 28% M/M, and diesel rose 52% Y/Y. This reads more like a report from the Gulf than one on the U.S. consumer. The key figure is diesel, as it reflects transportation costs and turns an energy crisis into a broader inflation problem. This was the last inflation print before the rate announcement. Core CPI increased 0.3% versus expectations of 0.2%, and declined to 2.4% Y/Y. As a result, the part of the index excluding energy tightened despite the rise in energy. Rate markets now price a 25 bps rate increase at the September 16 meeting, the first move this year within a target range unchanged since January at 3.50% to 3.75%. The 25 bps hike in the funds rate does not open a strait. The IEA issued its monthly report Friday and cut demand for 2026 by another 940K barrels a day to 2.5 million barrels. The same report has supply dropping by 5.7 million barrels a day to 100.7 million in the current year, with over 10 million barrels a day of Gulf production remaining offline until August. Output is expected to rise by 8 million barrels a day in the coming year, with recovery occurring through the same strait. Stocks have bridged the gap. Observed stocks have declined by 507 million barrels since the start of the war, an average drawdown of 2.8 million barrels a day, while August alone saw a reduction of 95 million. The agency expects Gulf production to recover in 20272027. The rest was absorbed from stocks, and stocks will eventually run dry. The FOMC will meet on September 15 and 16, with the statement, press conference, and new Summary of Economic Projections (SEP) all coming on the latter date. Ministers from the Gulf states will meet in Salalah the day before. Futures markets put the quarter point at about 70%, an events exchange at about 57%, and a prediction market at about 49%. A European bank bumped up its forecast for year-end Brent by $10.00 this week. Brent is trading above $100.00. The June memorandum between Washington and Tehran led to a corridor off the Omani coast. The Iranians saw the southern corridor as violating the agreement and attacked ships using the route, and the interim deal fell apart. Monday's talks could lead to a corridor the ships use. Two corridors have been proposed since June. The session high near $100.50 is the first resistance point, with the $101.00 handle resistance above it. Above that is the May 18-20 shelf near $103.00, followed by the late April high below $107.50. The session low near $95.50 has held the entire pullback. The Thursday low near $93.00 is the next support level, with the $90.00 handle resistance below it holding the September advance. Higher, provided that the $95.50 area holds, with $100.50 being the first objective and $103.00 following after that. Friday's low pulled back less than half of the previous four-day rally, but since then, it has gained back about one-third of the pullback. The daily Stochastic Relative Strength Index (Stoch RSI) of near 80 has rolled over but now turned back up without rolling over further. Invalidation is a daily close below $93.00, invalidating Thursday's low. Salalah pricing from insurers does it even faster than any chart level, as does reaching demand on the rate path.