Why has Brent crude climbed 7.2% to 104.98 over the past month?

Brent crude is 104.98, up 7.2% over the past 30 days. A move that size changes what refiners pay for feedstock and what marketers pay at the rack, so the first thing worth knowing is whether demand pulled the price up or something cut supply.

The wire points at supply. The clearest single day came when oil jumped on reports of Iranian attacks on tankers in the Strait of Hormuz, with Brent swinging back above $105 and trading at $105.02 per barrel, up 4.81% from the prior close. West Texas Intermediate changed hands at $92.69, up 5%. The same reporting had U.S. Gulf Coast operators shutting in production and prepping refineries ahead of an approaching storm. None of that is demand. It is barrels and refining runs coming offline, or traders pricing the risk that they will.

The refinery side of the wire tells the same story from a different angle. Ukrainian forces struck the Gazprom Neftekhim Salavat refinery in Bashkortostan, more than a thousand kilometers from the border, and drones hit the Omsk refinery as well. Those are large plants taken partly offline. Removing refining capacity does not lift crude the way removing crude production does, but it tightens the products those plants make, and it adds to the sense that supply is the thing moving this market right now.

So the climb reads as supply risk rather than a demand surge. The next question is what crude at 104.98 does to the people who buy it and sell what comes out of it.

Diesel followed crude up. ULSD futures are 4.818, up 5.5% over the same 30 days. Products rose, but by less than crude did in percentage terms. The obvious read is that a refiner buying dearer crude and selling only slightly dearer diesel would be earning a thinner margin this month.

Margins went the other way. A 3:2:1 crack of 64.19 is up 2.2 over 30 days. The crack is the rough margin on turning three barrels of crude into two of gasoline and one of diesel, and it widened while crude was climbing. The retail-wholesale diesel spread moved the same direction, 1.654 now, up 0.354 over the month. Both of those are margins, and both got bigger, not smaller.

Those two readings pull against each other. Crude up 7.2%, diesel futures up 5.5%, yet the margin on making fuel widened rather than compressed, and that widening while crude was rising is what needs explaining. The piece that reconciles them is on the capacity line. U.S. refinery utilization is 92.7, down 5.2% over 30 days. Less crude is being run into products at home at the same time Russian refineries are being hit abroad. When refining runs come down and plants go offline, the barrels of finished diesel and gasoline get scarcer faster than the crude does, and product prices can hold a premium over crude even as crude itself climbs. A supply squeeze on the product, not just the crude, would widen the crack the way the numbers show.

I can't fully separate those causes from the data in front of me. The utilization drop and the refinery outages push product margins the same way, and I don't have the gasoline leg broken out to see how much of the 64.19 came from it. What I am confident of is the direction. Crude rose on supply fear, product supply tightened alongside it, and the margin on refining widened rather than got squeezed by the higher crude bill.

For a fuel operator this shows up in a few concrete places. A refiner is paying more for crude but earning a wider crack, so this looks like a good month for anyone with units running, and they earned it by keeping plants up while others came down. On the marketing side, a higher wholesale number is the cost, with diesel futures at 4.818, but the retail-wholesale diesel spread widening by 0.354 means those who moved street prices up are capturing more per gallon than a month ago, at least for now. A buyer with no refining and no pricing power just pays more.

One number sits outside the oil story and is worth flagging so it isn't mistaken for part of it. Henry Hub natural gas is 3.249, up 11.4% over 30 days, a bigger percentage move than crude, with storage at 3415, up 6.3% and at its own 30-day high. Gas rising while storage is also at a high is its own market with its own drivers, and I'd treat it separately rather than fold it into the crude read.

The honest answer to the question is that Brent's 7.2% climb looks driven by supply risk, not by demand. The supply side of it is the Hormuz tanker attacks, the Gulf Coast storm shut-ins, and the strikes on Russian refineries. For fuel operators it has meant higher crude costs paired with wider refining and wholesale margins. The caution that comes with that is plain. Rallies built on disruption can give the gains back quickly once the disruption eases, so the margins on offer this month may not be the margins next month, and I wouldn't bank on them holding.

And that was just the data. See you tomorrow.