WTI settled at $105.83 on Tuesday, its highest in 4 months.

The pipeline that had been carrying most of Saudi Arabia's oil exports has been down since late last week. Bloomberg reported Wednesday that Aramco is working around the damaged section to bring about half the capacity back within days and the rest in about 6 weeks.

Tuesday's Board

What Got Hit

Drones hit the East West pipeline last Thursday, and Saudi Arabia shut it down as a precaution. Loadings at the Red Sea port of Yanbu stopped. European buyers were reportedly told some September cargoes were cancelled.

That line runs 745 miles from the oil fields in the east to the Red Sea. It can move 7 million barrels a day at full capacity.

North Dakota produced 1.153 million barrels a day in June. That one pipe can carry 6 North Dakotas.

Rystad Energy said the pipeline had been moving an average of 2.6 to 4 million barrels a day since late August. Estimates on a fix run from days to more than a month, depending on the source.

Why It Moved

The Strait of Hormuz has been choked since the war started in February. The EIA figures the Middle East had about 6.7 million barrels a day shut in during August. Brent averaged $91 that month.

This pipeline was Saudi Arabia's main detour around Hormuz. Tankers heading south out of the Red Sea still have to get past Houthi forces holding Yemen's coast. Libya also had 2 oilfields shut down amid protests.

World oil demand is actually falling. The IEA's September report has it down 2.5 million barrels a day this year. The price is climbing because the barrels can't get out.

What It Means On Location

The iron is starting to move. Last Friday's Baker Hughes count had 32 drilling rigs turning to the right in the Williston Basin. That's up 5 in one week, the biggest weekly jump there since October 2016. The Permian held at 268 on the same count.

The Bakken was already running strong. The state's June numbers showed natural gas at a record 3.58 billion cubic feet a day and a record 19,961 producing wells.

The Catch

$100 oil does not hit your check this week. Operators set budgets for the year and adjust them each quarter, and a lot of production gets hedged ahead of time. Crews and iron take months to line up.

Operators told the Dallas Fed earlier this year they need about $66 to drill a new well and make money. Oil is well over that now. Baker Hughes has the US rig count up 52 from a year ago.

The last long stretch of oil around $100, 2011 to 2014, ended in a bust.

The Fuel

EIA's weekly national diesel average hit a record $6.285, up almost 32 cents in 7 days. Adjusted for inflation, 2008 was still worse. Distillate stocks are the lowest for any August in EIA's weekly records, which go back to 1982.

Most fuel surcharge tables key off that EIA weekly number. If you're an owner operator, you're eating the gap between a surcharge that resets once a week and a pump price that moves every day.

Where It Goes

EIA's latest outlook came out right before the pipeline got hit. It already had Middle East production below pre-war levels until the second quarter of 2027. It also had world inventories falling through the end of this year.

Every day that line stays down pulls more Saudi barrels off a market that was already short.

Who's Hiring

Outfits are hiring this week in North Dakota, the Permian, Wyoming and East Texas, including seats that don't need a CDL. The current board is the one to check.

Field Report

Drop your basin and what you're seeing on location this week. Tell us if new iron is moving in, if crews are picking up, or if it's the same work with a bigger fuel bill. Owner operators, put what diesel is costing you at the island.