October WTI settled at $100.30 as Yanbu halted loadings

Shipping sources told Reuters on Tuesday that crude loadings had been suspended at Yanbu, Saudi Arabia's Red Sea export hub, after attacks on the East-West pipeline that carries oil around the Strait of Hormuz. The NYMEX October West Texas Intermediate contract still finished Friday at $100.30 a barrel, up 25 cents from the prior week's close. The spike in between did not survive the week. U.S. diesel tanks stayed short, and the energy-stock fund that is mostly producers finished lower.

Last week WTI had just settled at $100.05, with the International Energy Agency reporting that August had drained observed global tanks and that more than 10 million barrels a day of Gulf output remained shut in. This week tested whether a second Saudi export route going offline would lift that $100 handle. It did, for one session. Then it did not.

Distillate tanks are still 13% short

The U.S. inventory print that landed in the middle of the week described tanks as of Friday, September 11, a week that had already closed. The Energy Information Administration, in its Weekly Petroleum Status Report released Wednesday, said commercial crude stocks fell 0.6 million barrels to 423.4 million, 1% above the five-year average. That is not a tight crude complex.

The products are a different ledger. Gasoline inventories rose 0.8 million barrels and still sat 5% below the five-year average. Distillate inventories rose 1.6 million barrels and remained 13% below that average, 15.8 million barrels short of the five-year seasonal level. Two weeks ago those diesel tanks were 14% short. A 1.6 million-barrel build did not refill them.

U.S. refiners processed 17.3 million barrels a day that week, down 256,000 from the week before, running at 96.8% of capacity. Distillate production slipped to 5.2 million barrels a day, not enough to close the gap.

Yanbu is the pressure that margin sits inside. The October contract rose to $105.83 on Tuesday as Reuters reported that Riyadh had canceled some late-September cargoes to European buyers and that Yanbu loadings had stopped. By Wednesday it was back at $102.43. Friday's $1.61, or 1.58%, decline in the October contract gave back the rest of Tuesday's spike. November Brent settled Friday at $103.87 a barrel, down 74 cents on the week.

Reuters attributed Friday's drop to China, acting on a Saudi request, asking Iran to limit Houthi attacks on Saudi oil facilities. Yanbu was still not loading crude when the week ended. On Saturday the Houthis claimed a strike on the same hub. Separately, tanker fixtures through Hormuz itself printed a six-month high, the route Saudi crude uses when the Red Sea bypass is down.

OPEC+ is not the swing this month. Seven members decided on September 6 to keep October output at September's required levels and to meet again on October 4.

Refiners paid. Producers and services did not

If you hold the sector through State Street's $41.8 billion fund of S&P 500 energy companies, AXLE, this was a refining week, not a crude week. The fund fell 1.3% to $64.31.

Marathon Petroleum, Valero, and Phillips 66, 18% of the fund together, contributed 1.1 percentage points. Marathon rose 7.3% to $424.89, just under its 52-week high of $428, and is up 164% year to date. Valero rose 5.9%.

Exxon Mobil, 20% of the fund, fell 1.5%. Chevron fell 2.1%. ConocoPhillips fell 4.0%. SLB, the oilfield-services line in the same portfolio, fell 8.8% and was the largest single drag. State Street's oilfield equipment and services fund BXES fell 5.0%, with Oceaneering, Patterson-UTI, SLB, and Tidewater the four largest drags. State Street's equal-weight producers and refiners fund AXOP fell 2.6%, as the refiners in it rose and the exploration names fell.

AXLE charges 0.08%. It cannot be used as a substitute for the barrel.

November WTI settled $4.22 under October

Near-dated crude funds and producer-equity funds are not two ways to own the same thing. United States Oil Fund BUSO holds near-dated WTI futures. ProShares' K-1-free crude fund AOILK tracks three WTI contract schedules in equal weight rather than the front month.

AOILK was the crude fund that made money this week, rising 1.4%. The near-dated fund fell 0.7%. Invesco's WTI fund BDBO fell 0.7%, in line with BUSO.

BUSO already has November WTI as its largest line, at 46% of the book, so it is not a clean print on the October contract that settled at $100.30. That November contract settled Friday at $96.08, $4.22 below October. AOILK holds three farther schedules, December 2026, May 2027, and December 2027, further down a curve where the prompt barrel is priced above later ones.

The table is Friday-to-Friday total return. The balanced WTI book was the only crude wrapper that rose; oilfield services were the worst of the equity books.

United States Natural Gas Fund DUNG rose 2.4% on the week and remains down 15.1% year to date. Crude holding $100 and U.S. gas holding $3 have not been the same market this year.

Refiners already at 96.8% of capacity cannot close a distillate hole by running harder. The next measurement of that hole is Wednesday's inventory print. A holder of AXLE is not waiting on that print for the barrel. They own a mix that fell this week because Exxon, Chevron, ConocoPhillips, and SLB outweigh Marathon, Valero, and Phillips 66, even when distillate is the short tank.