"My men can eat their belts, but my tanks have gotta have gas" - Patton
Editor’s Notes: (1) I’ll be off next week, again on account of travel. (2) It appears that the artist / satirist fka “Mr Skilling” has returned to X - New Bit Friday has been sorely missed -
CRACKS.
Dated Brent hit $131 on Oct 13th…
...then dropped ~$10 in a day Oct 16th
NY Harbor diesel crack >$100/bbl...
The physical premium blinked.
Flux had Dated at ~$130.80 on Oct 13th with a ~$18.78 physical premium…
…then, Oct 16th Dated dropped ~$10/bbl, one of the biggest one-day falls in physical premiums on record.
A possible explanation has three parts:
Premiums set in assessment windows with no actual trades;
Cheaper freight pulling US barrels into Europe while Saudi crude kept flowing from Yanbu; and,
Refiners pushing back on delivered prices, with three big sellers offering Midland early.
Meanwhile, futures went the other way…
Brent & WTI closed the workweek (Oct 16th) at $109.86 & $101.41, respectively (up $5.14 & $9.56 on the week).
And diesel didn’t blink…
The NY Harbor diesel crack breached $100/bbl on Oct 13th.
Since the Iran war began, European gas is up 163% & diesel 67%.
Patton’s quartermasters would recognize the problem.
Moving on -
ST. PETERSBURG.
Last night, Ukraine executed a drone attack on St. Petersburg (its largest yet on the city).
The targets were oil storage sites, along with a data center, a substation, a warehouse and a bridge.
The main target was the St. Petersburg Oil Terminal, in seemingly obvious defiance of US demands to halt strikes against the Russian energy industry.
The distinction of hitting a large terminal is noteworthy.
After repeated attacks on Russian refineries, the Russian oil industry has been increasingly moving towards exporting crude that would otherwise have been refined domestically.
It would not be surprising to see oil terminals targeted in tandem with refineries (absent a ceasefire materializing).
OTHER.
Grant Williams’ podcast with Mike Green (from ~a month ago) is even more relevant than when it was released & worth a listen
Interesting analogy (from Jeff Davies), comparing Chienere to NeoClouds
That’s it for this week -