For the first time ever, the margin refiners earn turning crude into diesel...the diesel crack...settled over 100 a barrel this week. Normal is 15 to 25. Here is what that means for every hand and every driver reading this.
The Board Tonight
- WTI...87.83
- Henry Hub...2.73
- Diesel (US retail avg)...5.454
Never Been Done
- The diesel crack hit an all-time high of 102.20 a barrel Monday and closed in triple digits for the first time in history. That is 4 to 6 times normal.
- U.S. refineries ran at 97.2% of capacity last week...the hardest run rate since 2019.
- American plants pulled in about 17.4 million barrels of crude a day, the most since September 2019.
- Gulf Coast refiners ran 9.62 million barrels a day...their fastest pace in eight years.
Why It Moved
- Russia's diesel export ban and strikes on Russian refineries pulled diesel off the world market.
- Tension around Iran and the Strait of Hormuz kept a risk premium under crude...WTI closed at a one-month high tonight.
- U.S. distillate inventories drew to their lowest level for this time of year since 1996...about 13% below the five-year average.
- So refiners chased the margin and ran everything they had.
What It Means On Location
- For the hands pulling crude out of the ground...this is demand. Refineries running redlined means your barrels have a home.
- For anybody burning fuel...hotshot, CDL, company truck...the pump is the pain. National on-highway diesel sits at 5.454, up about a buck seventy from a year ago.
- Surcharges are climbing but they lag. And a record week at the refinery gate does not move field pay overnight...budgets move in quarters, not headlines.
Where It Goes
- As long as Russian barrels stay off the market and Hormuz stays tense, diesel stays tight and volatile.
- The number to watch is the weekly distillate draw...that is the one that decides what your next fill-up costs.
Field Report
What is diesel at your pumps tonight? Drop your basin and your local price...Bakken, Permian, Eagle Ford, DJ, Rockies, Mid-Con, wherever you sit. Let's build the real fuel map from the field.