Oil fell $37. Fuel didn't.
Somebody's getting squeezed and it's the guy holding the pump handle.
The Board Right Now
- WTI...82.57
- WTI March peak...119.47
- Diesel national average...5.40
- Diesel one year ago...3.70
What Just Happened
US crude inventories jumped 17.4 million barrels last week
Biggest weekly build since January 2023
Analysts expected a DRAW...they missed by almost 19 million barrels
Crude is $37 off its March peak...and even a bounce this week couldn't get it out of the low 80s
And diesel just set the record for the most expensive August in American history
Why Your Fuel Bill Didn't Get The Memo
Crude isn't the problem. Refining is.
- S&P Global says the world has lost 7.5 million barrels a day of refining capacity
- Russia supplies 10% of the world's diesel...drone strikes have knocked out an estimated 40% of their refining and they cut off diesel exports through the end of the year
- Saudi's 400,000 barrel a day Jazan refinery has been dark since July 27 after a Houthi drone hit it
- US refineries are already running 96.2% of capacity...there is no more throttle left to push
- US diesel stocks are sitting 12% below the 5 year average
You can't refine your way out when the refineries themselves are the casualty.
What It Means On Location
Fill a 250 gallon semi tank tonight and you're paying about $425 more than the same fill a year ago.
Every hotshot run, every water haul, every crew truck...same math.
And here's the part that matters for your job security. Cheap crude with expensive products means refiners are making record margins on every barrel they can get their hands on. The pull on crude is real. That's rigs staying up...593 running this week, 54 more than a year ago.
The Catch
Diesel at 5.40 is the August record...not the all time record. That was 5.81 in June of 2022. If somebody says we've been higher, they're right. We've just never been here in August.
Where It Goes
EIA drops fresh numbers Monday. Hormuz is still closed at day 167. OPEC+ meets September 6.
Any one of those breaks and this board moves again.
Field Report
What's diesel at your truck stop tonight? Drop your basin and the price on the sign. Building the real map in the comments.