Crude hits six-month high at $103 WTI as US taps SPR again for Phillips 66
Crude closed the week at a six-month high, with December WTI up 4.46% to $103.44 and December Brent up 6.24% to $116.93, on the back of 7.81% and 4.91% gains the week before. For anyone buying rack product, that is two straight weeks of the wholesale number climbing out from under you.
The Department of Energy made the squeeze official on Friday. It authorized an emergency exchange of up to 400,000 barrels from the Strategic Petroleum Reserve's West Hackberry site to Phillips 66's Lake Charles refinery, covering a temporary disruption to crude deliveries while prices ran above $117. The reserve is already at its lowest level since 1982, so there is not a deep cushion left to lean on.
Houthi attacks and the DPA
Goldman Sachs analyst Daan Struyven said refiners see a high probability of a sharp drop in oil supply as Houthi attacks on shipping and infrastructure escalate, and refiners themselves are buying more crude to get ahead of it. That buying is part of what is pushing the benchmarks up.
Trump invoked a Cold War-era law to push more oil refining as pump prices climbed. Pennsylvania gas prices jumped 39% while consumption fell just 0.1%, which tells you drivers are paying whatever the sign says and not cutting back. Contract talks stalled at the Linden, New Jersey refinery, per the union, so East Coast refining capacity has a labor question hanging over it too.
Russian diesel to New York
The first Russian diesel tanker since 2022 is headed for New York under a Trump-Putin deal, FreightWaves reported, with the timing read as a move to add supply ahead of the midterms. For jobbers on the East Coast, more diesel barrels landing could take some pressure off a tight distillate market as heating season starts.
It may not reach every buyer who needs it. Trump's $8 billion farm lifeline will not fully solve farmers' diesel problem, The Hill reported, and heating oil is already a live issue in several Senate races as winter nears.
More HOS relief for haulers
FMCSA updated its fuel emergency waiver, and more haulers now qualify for hours-of-service relief, though conditions apply. If you are moving product into short markets, check whether your runs fall under the revised terms before you dispatch, because the relief is not blanket.
Year-round E15
Trump used a Sioux City rally to push permanent year-round E15 again. "We also gave Iowa an emergency waiver to sell E15 all year round. And with Ashley in the Senate, we will make it year-round E15. We'll make it permanent," he said at Sioux Gateway Airport. The Iowa Renewable Fuels Association has wanted this nailed down for years. For retailers outside the Midwest it stays a maybe until something clears Congress, so do not re-badge dispensers on a rally line.
What to watch
Whether the DOE authorizes more SPR exchanges if other refiners report crude delivery problems, and how fast that 400,000-barrel draw gets replaced. Watch the Linden contract talks for any walkout that would pull refining capacity. The Baker Hughes count held at 603 rigs, oil up one to 460, so domestic drillers are not adding supply to answer the price move yet. And watch when the Russian diesel actually discharges in New York.