Crude's fourth straight day of gains lifts rack prices for jobbers
Rack prices are climbing in California and along the Gulf this week. Crude posted a fourth straight day of gains, with Brent at $91.53 and WTI at $85.47, and the barrels your terminal pulls from are getting more expensive on both ends.
Hormuz and the rack
Tanker-tracking data shows traffic through the Strait of Hormuz slowing again after a vessel attack, and the June ceasefire expired two days ago with Iran and the United States both talking harder and neither back at the table. That tightens crude supply, and jobbers feel it through the rack. When Brent climbs four days running, your posted rack usually follows within a cycle or two, though the lag varies by contract, and the wholesale marketer pays the higher cost before any fuel reaches the pump.
Watch your unbranded supply first. Branded contracts tie their posted rack to the refiner's formula and tend to lag, so unbranded and spot buyers see the spike sooner. If the spread between branded and unbranded narrows or flips this week, the crude run is showing up in real cost.
The export pull
US refiners are running hard and shipping the product out. Refiners in the US and India have ramped exports to buyers who used to source from the Middle East and Russia, and analysts and traders told Reuters those refiners should keep pocketing billions as long as the wars disrupt Middle East and Russian supply through summer driving season. Product loaded for export isn't sitting at a Gulf or East Coast terminal for your truck.
Exports are also where allocation could tighten. Crack spreads are testing records, so refiners have every reason to run the units flat out and send product where it clears highest. For a domestic jobber, record cracks are not good news: the refiner takes the margin and points product at the export desk, so your rack can tighten even while refineries run flat out.
Venezuelan barrels
US refiners are now absorbing over half of Venezuelan crude, per Quantum Commodity Intelligence, one reason Gulf units are running as hard as they are. Heavy Venezuelan grades feed the coking refineries that make much of the diesel moving through Gulf terminals, so that supply reaches your distillate rack directly.
What to watch
Rack cost could ease if Hormuz traffic normalizes and crude backs off. It could tighten further if export loadings stay heavy into the driving-season peak. Watch your branded-versus-unbranded spread and any allocation notices from your supplier over the next week.