September 8

9/8 – WEEKLY COMMODITY SUMMARY:

• U.S. consumers have been lucky with fuel prices this year. Several Middle East truces, a sharp reduction in Chinese oil imports, and a generous pull from U.S. oil reserves have helped keep energy prices tame for most of the year. But the on-again, off-again war is on again, and the U.S. naval blockade of the Persian Gulf continues. Yes, some shipping has resumed – but the threat of attack by Iran gives shipping insurers reason to pause.

• The long-term trend is for increasing global oil production, declining demand, and lower prices. The shorter-term 2026/27 outlook is just the opposite. Crude oil prices are creeping higher and U.S. fuel prices are at all-time record highs.

• Rising diesel prices will boost restaurant costs and consumer prices with surcharges at every level of the supply chain. Rising gasoline prices hit consumers like a consumption tax. And the fuel-inflation relationship will pressure the Fed to raise interest rates – likely in December after midterms.