Dubai crude nears $100 as Asian buying spree and low SPR squeeze the market
Asian refiners are buying Middle Eastern crude hard enough to push Dubai futures close to $100 a barrel, and that is the number US fuel buyers should be watching. Indian Oil Corp and PetroChina are competing for the same grades, along with South Korean and Japanese refiners, per Bloomberg traders. That buying pulls barrels away from other buyers and helps set what US refiners pay for feedstock.
The SPR floor
US crude inventories are down again and the Strategic Petroleum Reserve is lower than it has been. With the Persian Gulf flaring up again, there is less room to absorb the next shock, and that could keep crude firm even without new fighting.
Cracks stay fat
US refiners are running flat out. EIA's latest Weekly Petroleum Status Report put utilization at an eight-year high, with product cracks still strong and exports pulling barrels out fast enough to tighten domestic crude balances even as imports rise. For jobbers there are two takeaways. Margins downstream are holding up, and refiners have every reason to keep running hard. But the strong exports mean the domestic tightness stays.
Russian outages
Ukraine's defense ministry says its August drone campaign hit 12 Russian refineries and two defense plants, and the strikes have taken Russian refining capacity offline. Chinese independents are now paying more than $7 over Brent for Russian ESPO, with offers as high as $10. More Russian refining offline, and higher premiums China pays, tightens the global product pool that sets US export pricing.
The refinery exemptions
EPA granted small refinery exemptions from blending ethanol and other biofuels. The Renewable Fuels Association pushed back hard. For anyone blending or trading RINs, a batch of exemptions loosens compliance demand and could move RIN values, which feeds through to blend economics at the rack.
What to watch
Whether Dubai actually clears $100 and drags US crude benchmarks up with it. Whether the SPR draw forces a policy call on further releases. How many more Russian refineries go down. And whether the RFA fight over the exemptions turns into a broader challenge that resets RIN pricing.