WTI up to $85.47 on fourth straight day of gains as Hormuz tanker traffic slows
Crude closed higher for the fourth day running. West Texas Intermediate is $85.47 a barrel and Brent is $91.53, per OilPrice.com, after tanker-tracking data showed traffic through the Strait of Hormuz slowing further. Both Iran and the United States have hardened their language and neither side looks ready to talk, two days after the June ceasefire expired. For US jobbers, that is another leg up in your replacement cost, and it is coming out of the tension at the Strait.
The move is riding on top of an already tight products market. Russia's refining sector is a big reason global gasoline and diesel prices have stayed elevated, and it is getting worse by the week.
Gulf Coast exports
US crude is finding a strong bid across the Atlantic. Gulf Coast exports rose 20% week over week to 3.6 million barrels a day, RBN Energy reports, with Enterprise's Houston loadings up 21% to 786,000 barrels a day and Seaway Freeport back in the export market for the first time in eight weeks. European buyers are pulling barrels, and when export demand is this firm it keeps a floor under domestic prices even before the Hormuz premium. Watch that pull if you are buying anywhere near the water.
Citgo Corpus Christi
Citgo shut the fluid catalytic cracker at its Corpus Christi refinery in the latest upset on the Gulf Coast, per Quantum Commodity Intelligence. The FCCU is the unit that makes gasoline, so an outage there tightens the local rack at the same moment crude is climbing. If you buy in South Texas, expect basis to firm until that unit is back.
Russian supply
Ukrainian drones hit the Ufa refinery in Bashkortostan, one of Russia's largest refining and petrochemical complexes, setting a unit that was already under repair on fire. Local officials say four of six drones were shot down and repairs could take several days. The strikes are pulling real volume out of the market. Russia now has a motor-oil shortage, with some popular lubricants out of stock and prices up 1.5 to 2 times in two months, according to industry sources. That barrel of products Russia isn't making has to come from somewhere, and it keeps global cracks wide.
E15
Senate Majority Leader Thune said the Senate path for year-round E15 still faces a hurdle from small refiners, per Aberdeen News. No relief there yet for retailers who want the summer waiver settled.
What to watch
Whether Hormuz traffic keeps thinning, how long Corpus Christi's cracker stays down, and how much more Russian refining capacity comes off line. Crude could ease if the strait stays open. It may not.