WTI Crude Drops 3.9% to $89 as Saudi Supply Improves and Hormuz Flows Recover

Oil prices fell sharply on Tuesday as fears of prolonged supply disruptions eased on two fronts. WTI crude settled down 3.48%, or $3.22, to $89.01 a barrel, while Brent dropped below $103, with Bloomberg reporting Middle East exports approaching pre-war levels as crude flows through the Strait of Hormuz resumed near normal volumes. Improving Saudi supply flows also contributed to the retreat.

Natural gas prices compounded the energy sector's selloff, with the November Nymex contract closing down 3.06%, or nearly 10 cents, to settle sharply lower for a second consecutive session. The decline came after TC Energy completed repairs to a ruptured pipeline in West Virginia over the weekend, restoring gas production to near-normal levels and removing a key source of supply anxiety.

Despite falling energy prices, Wall Street drifted lower, as investors remained worried that persistently elevated energy costs could keep inflation pressures high. New York Fed President John Williams said another rate hike in 2026 may be appropriate but signaled no immediate urgency, prompting traders to pare back bets on an October increase. Fed Governor Michael Barr separately continued to signal that further rate increases may still be needed, keeping yields in focus and weighing on broader equities.