On Thursday, May 7, international oil prices remained volatile at elevated levels. Supply risks linked to restricted traffic through the Strait of Hormuz continued to support crude prices, while softer U.S. demand indicators capped further upside.
Market At-A-Glance
- Brent Crude: around $101.96/bbl
- WTI Crude: around $95.13/bbl
- Market Tone: Backwardation remains in place, reflecting tight prompt supply and persistent geopolitical risk premium.
Key Market Drivers
U.S. Inventories Declined
EIA data showed U.S. commercial crude inventories fell by 2.313 million barrels to 457.2 million barrels for the week ending May 1, 2026. Gasoline stocks dropped by 2.5 million barrels, while distillate inventories fell by 1.3 million barrels.
Middle East Risk Premium Remains Elevated
Restricted navigation through the Strait of Hormuz continues to disrupt crude and refined product flows. The waterway normally handles around 20% of global crude and refined product movement.
Refined Fuel Markets Are Tight
Asian jet fuel exports dropped to 596,000 bpd, while diesel exports fell to a nine-year low, highlighting deep regional supply stress.
Demand Signals Are Mixed
U.S. total product supplied fell to 19.48 million bpd, and gasoline consumption also declined, suggesting high prices are weighing on end-user demand.
Sector Highlights & Recommendations (For Reference Only — Not Investment Advice)
| Asset Name | Ticker/Type | Reason for Interest | Recommendation |
|---|---|---|---|
| Exxon Mobil | XOM.US | Strong cash flow profile supported by elevated oil prices. | Buy/Hold |
| Chevron | CVX.US | Integrated upstream-downstream model offers defensive exposure. | Hold |
| CNOOC | 0883.HK | High sensitivity to Brent price strength. | Watch/Hold |
| Equinor | EQNR.US | Rising Asia-Pacific demand for alternative energy supply. | Watch |
Outlook
In the near term, oil is likely to trade in a $98–$108/bbl range. If restrictions around the Strait of Hormuz persist, Brent may remain above $100. However, weaker U.S. consumption data could limit further upside.