WTI Tops $101 As Strategic Petroleum Reserve Nears Record Low

Following Brent's lead (which is following Shanghai's demand push), WTI topped $100 this morning for the first time since May, fueled by festering Middle East hostilities (with Saudi-Houthi attacks stealing the headlines) and the Saudis latest statement showing crude output at a 36-year low.

That suggests the market is transitioning to a regime where $100 Brent is the new floor.

"The economic dimension is crucial," said Andreas Krieg, a Gulf expert from King's College London.

"Saudi Arabia is already contending with disruptions near the Strait of Hormuz and Houthi pressure on shipping in the Red Sea.

Attacks on Jazan and other vital economic infrastructure in the south place the Kingdom's export system under pressure from both ends."

Last night's API report showed de minimus product inventory moves withe a modest crude draw...

API

• Crude -2.6mm

• Cushing

• Gasoline +348k

• Distillates -265k

DOE

• Crude -391k (-300k exp)

• Cushing -684k

• Gasoline +1.27mm

• Distillates +2.087mm

Unlike the API report, refined products saw notable inventory builds last week while crude saw a tiny draw (the first time inventories have declined in back-to-back weeks since late June)...

Cushing stocks dipped and remain just off 'tank bottoms'...

The Trump admin drewdown a tiny 1.24mm barrels from the SPR last week - the smallest since the war began...

...now just 7mm barrels away from record lows...

US Crude production hit a new record high...

As Bloomberg's Tai Liu reports the 4-week moving average for US gasoline demand was 8.8 million barrels per day for the EIA week ended 9/4/2026, a week on week decline of 104,000 barrels per day. Meanwhile, the more volatile weekly gasoline demand figure saw a more sizable decline of 371,000 barrels per day. US gasoline crack spreads remain elevated at $40 per barrel, not far from the recent peak of $45 per barrel. US gasoline demand should continue to decline seasonally in the weeks ahead, especially at these elevated price levels. 

WTI was hovering around the $100 level ahead of the official inventory data...

...and surged above $101 after the data...

Earlier this morning, we saw PPI driven by a rebound in crude in August. At this pace of rise in crude (and fuel) prices, we will see inflation surge again next month... dragging Warsh along with more hikes (which will do nothing to solve the supply constraint).

One word - stagflation!