Brent Crude Tops $107 as Chinese Refinery Restarts Lift Diesel Cracks to $110

Currie, speaking on CNBC, attributed the move primarily to Chinese demand recovery after refinery curtailments earlier in summer. High margins prompted restarts, creating an immediate crude call that tightened physical balances. Equities and longer-dated futures began pricing persistence, shifting market views from transient shock to sustained scarcity. HSBC's Paul Bloxh separately flagged the onset of a commodity super-squeeze in the same week.

Underinvestment traces to post-2020 capital discipline and policy signals favoring renewables over conventional capacity. Resulting supply elasticity remains low while demand from Asia rebounds. States face the same incentive: secure physical inputs before price signals clear new projects. This dynamic raises the floor on energy costs regardless of stated climate targets.

The ledger shows gains for producers holding spare barrels and costs for downstream economies absorbing higher input prices. Central banks tracking core inflation will register the pass-through in transport and manufacturing indices. Forward curves already embed the adjustment; equities in extractive sectors have begun to follow.