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Times in New YorkLatest: daily note, 9 Nov

Daily note, Monday 2nd November 2026

WTI: the war premium comes out

Rubio's "peacefully" took the post-midterm strike premium out. Brent Jan/Mar lost 15% and WTI Jan/Mar a fifth: spreads fell with flat price. Cushing is 9.3% over average and diesel is the only tight leg. SPR at 282.6M bbl, with exchange deliveries due in November and December.

By darkmatter · Published

Cracks, spreads, flows

The premium came out of the curve, not just flat price. Rubio said over the weekend that Trump would "prefer to do it peacefully" with Iran. Qatar's talks on reopening Hormuz ran a third day. The market had priced strikes after Tuesday's midterms, and Monday took that out. WTI gapped lower at the Sunday open, bled through Asia and London, then flushed at 13:30 GMT. Brent Jan/Mar is down 15% from Friday's settlement and more from last Monday. WTI Jan/Mar is down a fifth. Dec/Jan narrowed by about a sixth. When spreads fall with flat price, the premium is leaving. No surplus showed up overnight.

The physical never confirmed the premium. Cushing holds 27.0M bbl, 9.3% over the 5-year average. Loadings at Fujairah and the Omani terminals, outside the strait, are 36% above prewar levels (Kpler). Barrels are getting round Hormuz. The backwardation was paying for a risk, not a shortage.

Brent gives back more. The Brent–WTI Jan futures spread narrowed on the day. Brent carried more of the premium, so it loses more. At spot, Dated Brent was still $19.7 over WTI Cushing on 27th October. The arb is still wide enough to keep US crude leaving: exports were 4.85M b/d in the week to 23rd October, up 1.41M on the week.

Cracks: diesel still pays. The latest EIA spot data, for 27th October, has the Gulf Coast diesel crack at $96.8, from $100.5 on the 23rd. New York Harbor fell harder, to $93.5. Gulf Coast gasoline $26.9, 3-2-1 $50.2. Futures diesel cracks have slid further since. Diesel has slid all week as refiners come back from maintenance. But distillate stocks are 102.8M bbl, 9.6% under the 5-year average. That's the floor under refinery crude demand.

SPR: 282.6M bbl in the week to 23rd October, down 0.1M. That's 126.5M under a year ago and 34.7% under the 5-year average. Weekly draws have been small: 2.8M since 4th September. That changes now. DOE has deliveries from awarded exchanges scheduled for November and December, and on 29th September it offered up to 40M bbl more from Bryan Mound and Big Hill. No award for that round has been published. Exchange barrels go back later with a premium, but in November and December they land on the Gulf Coast. That's more prompt crude near the hub and less need for imports, which weighs on WTI spreads into year-end. Wednesday's EIA is the check: a bigger weekly SPR draw means deliveries have started.

Funds were already leaving. Managed money was net long 31,128 WTI contracts on 27th October, down 5,059 on the week, with longs cut by 5,980. That's 24% of the 3-year range. Today was premium coming out, not a crowded long getting liquidated. There's little fund length left to sell. (Charts.)

Asia is buying Gulf crude, not American. As Hormuz flows recover, Asian refiners are taking more Gulf barrels, and long-haul freight is pricing Atlantic Basin crude out of the East. US crude has to clear in Europe. That keeps the arb doing the work for WTI exports, and it leaves US East Coast refiners paying up for imports while Brent stays wide.

The sides are still far apart. Talks are moving, but Tehran's terms haven't softened: the US blockade lifted, oil sanctions lifted, assets unfrozen. Washington's red lines haven't moved either. Iran is also threatening a wide response, including against Gulf neighbours hosting US forces, if strikes resume. Monday priced the talks. It didn't price a deal.

OPEC+ is on hold. Seven producers kept December targets unchanged on Sunday. They meet again on 29th November for January.

The read: the premium is coming out and the hub isn't tight. Into Tuesday, spread rallies on headlines are for selling. The risk is a strike after the vote. Trump's "deal, or we'll just end it" line still stands, and a strike puts the premium straight back.

Calendar (London time)

  • Tuesday: US midterm elections. Trump on Sunday: "Either they'll make a deal, or we'll just end it."
  • Tuesday 21:30: API weekly crude stocks
  • Wednesday 15:30: EIA Weekly Petroleum Status Report. Watch the SPR line.

Cracks and Dated Brent–WTI are calculated from EIA daily spot prices against WTI Cushing (latest published: Tuesday 27th October). Timespreads are described from futures settlements, not quoted. Prices are taken from a CFD feed (USOUSD) and can differ from futures prices and from your broker's quotes.