WTI hits $103.44 six-month high as US taps SPR again for Phillips 66's Lake Charles refinery

WTI for December settled at $103.44 a barrel, up 4.46% on the week after a 7.81% jump the week before. That price sets the cost floor on every gallon at the rack. Brent closed around $116.93, up 6.24%. The run is Houthi-driven: escalating attacks on Middle East shipping and infrastructure pushed crude to a six-month high, and Goldman's Daan Struyven says refiners are among the buyers loading up on barrels because they see a high probability of a sharp supply drop ahead.

For a jobber, the math is simple. Crude is the biggest line in your delivered cost, and a two-week move of this size feeds straight into wholesale diesel and gas within days. Your buy price goes up before your sell price catches, so margins compress on the way up.

The SPR draw

The Department of Energy authorized an emergency exchange of up to 400,000 barrels on Friday to keep crude flowing to Phillips 66's Lake Charles refinery in Louisiana, citing a temporary disruption to deliveries. The barrels come from the reserve's West Hackberry site. Oil was above $117 when DOE acted.

The SPR is already at its lowest level since 1982. Washington is reaching into a thinner cushion to patch a single refinery's crude supply, which tells you the federal backstop has less room than it did the last time prices ran. If more disruptions stack up, the SPR may not have enough barrels left to cover them the way it has before.

Linden labor

Contract talks stalled at the Linden, New Jersey refinery, according to the union. No strike yet, but a work stoppage at a Northeast refinery tightens a regional market that is already paying up for crude. East Coast jobbers should keep an eye on this one, because local supply disruptions hit basis harder than the headline crude number does.

Richmond H2S

Chevron's Richmond refinery was traced as the source of a hydrogen sulfide smell across the Richmond, California area. An egg-like stench usually points to a process upset or flaring, which can mean reduced runs. On the West Coast, where supply is already tight and isolated, any Richmond hiccup can move PADD 5 wholesale fast.

What to watch

Whether the Houthi escalation keeps crude bid or whether a pause lets it ease back. Watch whether DOE authorizes more SPR exchanges now that it has gone back in, because a pattern there signals real physical tightness. And watch Linden: if those talks break down into a stoppage, Northeast diesel basis could widen going into the heating season.