Crude jumps about 5% on Hormuz tanker attacks as a Gulf Coast storm shuts in US production
Wholesale costs moved hard Thursday. WTI was changing hands at $92.69 a barrel, up 5% from Wednesday, and Brent swung back above $105, trading at $105.02, up 4.81%. Three things hit at once: Iran stepping up attacks on tankers in the Strait of Hormuz, US Gulf Coast operators starting to shut in production and prep refineries ahead of an approaching storm, and satellite images showing smoke over Saudi Arabia's Abqaiq facility, the largest crude processing plant in the world.
For a jobber, that is the whole morning. A 5% move at the barrel works its way into rack prices fast, and the storm piece matters more than the Middle East headlines because it hits US supply directly. Gulf Coast refiners prepping for weather means runs come down right when product is already tight. Watch your rack posting, not the cable news crawl.
Dyed diesel relief
Governor Pritzker signed an emergency declaration and President Trump issued an executive order letting farmers run non-taxed dyed diesel in registered highway vehicles during corn harvest, meant to take the sting out of high diesel costs this fall. Mark Bunselmeyer, the Illinois Corn Growers president, said farmers are grateful. Oklahoma officials are chasing the same kind of relief.
The early read from the people who move fuel is a shrug. FreightWaves reports little appetite in trucking for the red-dye break, and one analyst told TradingView the move will have little effect on prices. The mechanics still need to be worked out in Illinois, which is part of why the response is muted. For jobbers, the question is who handles the dyed product and how the tax exemption gets documented at the pump. Until that is clear, this reads more like a political gesture than a price change.
Federal gas tax on the table
Trump also said he is considering suspending the federal gas tax. No timeline, no detail yet, just the statement that it is under review. A federal holiday would cut the posted price at retail, though past suspensions have shown refiners and marketers capture part of any cut rather than passing it all through. For c-store operators, a mid-season change to the federal excise line is a margin and accounting headache before it is a traffic driver. Nothing is scheduled, so treat it as talk for now.
Propane draws down
US propane inventories posted a larger-than-expected draw as exports rebounded and Gulf Coast stocks pulled back from last week's record high, per RBN Energy. Total inventories are still 17% above the five-year average heading into the seasonal draw period, so the cushion is there even as the heating season starts. Suburban Propane units closed near $16.97, down 3.14% over 30 days. On the feedstock side, EIA weekly data showed ethanol production up 5%, stocks down 1%, and exports up 17%, with August corn use for fuel ethanol at 478 million bushels, 4% higher than a year ago.
What to watch
Whether the Hormuz and Gulf Coast disruptions hold or fade. Crude could ease back if the strait stays open and the storm passes without lasting refinery damage. Watch for the Illinois dyed-diesel rules that tell you how to actually sell the stuff, and watch whether the federal gas tax talk turns into a dated order or stays a maybe.