WTI hits $106 as oil supply squeeze widens

WTI rose $4.93 to $106.31 on September 15, reaching its highest level since May with crude supply cushions under pressure. The May peak of $109.24 is the next cited level, while crude has risen in 11 of the past 12 sessions.

Chevron Chief Executive Mike Wirth said Friday that inventories and other buffers that had limited earlier crude gains during the Iran conflict had been depleted. Refined products are tighter, with diesel described as already at a record high and still climbing.

Saudi pipeline repair window

Officials said attacks by the Houthis disabled Saudi Arabia’s east-west pipeline, with repairs estimated at 3-6 weeks and loadings suspended at a Red Sea port. In Libya, officials said protests forced some field closures, adding another constraint to available supply.

A senior Republican senator said he would consider limits on US diesel exports, a step that would redirect barrels toward the domestic market and reduce supply available to overseas buyers. If export limits advance, global diesel prices would face a policy-driven squeeze; if they stall, US refiners and trading houses would keep more access to international margins.

The oil rally is feeding into rates markets after US 10-year yields touched 5.04 percent, the highest level since 2007. If crude holds near $106 and diesel keeps climbing, central banks face a harder inflation trade-off; if pipeline repairs and Libya output return quickly, the pressure on consumers, Chevron and refiners would ease.

The next test is September 16, 2026, when the Federal Reserve faces a rates decision with inflation running above 3 percent and energy prices moving against disinflation.