The latest petroleum inventories (Sep-30-2026)

Inventories edged down for gasoline, jet fuel and distillates, with crude rising, as the total of all products decreased nearly 8M barrels. The SPR decreased about 700KB. Originally, 172M barrels were slated to be pulled, AND within 5 months(?). 130.6 Million barrels have been pulled and the drawdown has slowed significantly, with l00K barrels a day for last report, which is up slightly from last week. 

I have heard there is a plan to release an additional 40M barrels in the November-December timeframe, via an exchange program to be released at some unspecified ?date? in the future.

Gasoline consumption declined on both the y/y and d/d, based on the moving 4 week average.

Diesel continues to be the big story, with no relief in sight, imo. Much is made of the crack spread on diesel, but I question some of those numbers. Typically, everyone uses the 3:2:1 method to calculate the spreads and reasonably associate that number with the refinery profitability margin. 

The problem being the base unit being either the WTI or Brent benchmark, which excludes the shipping costs, insurance, etc. What appears to be excessive refinery margins, turns into profitability of insurance and shipping companies. This is particularly true for crude coming out of the Persian Gulf and destined for Asia. 

Any consideration of halting or slowing distillate exports would run into another set of problems. With most of the refined distillate for export sitting along the Gulf Coast... how to get it back into the U.S. heartland. 

There are existing pipelines that could be used, but might require displacement of some gasoline product, which would drive gasoline pump prices higher. It could balance the disparity in gasoline and diesel prices, but at what cost to the average person't pocketbook?

Then there is the issue of distillate fuel in Europe, which is the prime destination for a lot of this distillate export. Europe is already in dire straits over the natural gas inventory, unless a very, every mild winter. 

Food for thought!

An update on the August inflation numbers with a look at C.O.L.A

Here is a snapshot of August percentages...

The PPI continues to remain a bit high, imo. It is considered the forerunner of future retail pricing, which in turn... impacts the CPI.

As for the C.O.L.A. outlook...

There is a strong chance of 3.6%, based on the energy increases and expected weightings. I am anticipating something between 3.6% and 3.7% for the September CPI. That figure will abruptly change the discussion of the PCE slipping in August and replaced by renewed inflation worries.

I read where the Treasury is preparing to purchase long term bonds, to keep the lid on bond rates. The figure announced is a mere pittance, imo. It won't take long for the market to see through the mist.

This Treasury purchase should not be confused with any FED QE, as I mentioned in this post, from earlier this month.

The latest petroleum inventories (Sep-23-2026)

Inventories edged down for gasoline and distillates, with crude and jet fuel rising, as the total of all products decreased -0.3KB. The SPR decreased about 400KB. Originally, 172M barrels were slated to be pulled, AND within 5 months(?). 130.6 Million barrels have been pulled and the drawdown has slowed significantly, with less than 60K barrels a day for last report, which matches last week. 

Gasoline consumption declined on the y/y and remained in place for the 4 week running average.

I have lamented the diesel prices of the past few weeks, but that pump price may actually be nearing its apex. 

Advance Retail Sales, Through August-2026

It's been awhile since I last published retail sales, but I never stopped tracking...

As always, the orange dots indicate inflation adjusted and the blue dots are nominal retail sales. 

While the numbers might seem impressive, the inflation adjusted sales for March, 2021 were $589.455B, compared to August 2026 of $597.656B. So the actual quantity of goods has not changed much in over 5 years. It did bottom in April, 2024 at an inflation adjusted $567,273. The latter being a rate of about +2.1% annual growth. Not so bad. 

For more in depth... the Retail Sales Report.

The latest petroleum inventories (Sep-16-2026)

Inventories moved up for gasoline and distillates, with crude and jet fuel easing, as the total of all products increased +2.2MB. The SPR decreased about 400KB. Originally, 172M barrels were slated to be pulled, AND within 5 months(?). 130.2 Million barrels have been pulled and the drawdown has slowed significantly, with less than 60K barrels a day for last report. 

Gasoline consumption contines to decline on both y/y and m/m.

Gasoline prices continue to edge up, but diesel is the big story. Nationally, diesel prices will leap past $7 and California diesel with likely surpass $9.

The current national average of diesel, is at an all time high of $5.816 and when adjusting for inflation, is nearing the inflation adjusted figure of $6.554. It will surpass that shortly and will make a run for the July 2008 $4.767 inflation adjusted figure of $7.237.

While a lot of the issue is surrounding the Strait of Hormuz, the Ukraine shelling of Russia's refineries, and Russia limiting exports of refined products... also plays a role. 

At some point, natural gas will be an issue in Europe, but not my focus. U.S. stocks of NG are in decent shape and pricing not too out of the ordinary. For those interested in Europe, here is their website.

An Quick look at August 2026 Inflation data and COLA outlook.

With today's BLS inflation report, the numbers look like this...

The PPI report, from yesterday, lends to the belief the inflation rate is rising. 

The COLA projection currently looks like this...

It sits at the 3.5% increase level, but might make it to 3.6%, as energy will likely jump more than some of the tepid forecasts. I will go out on a limb and say 3.5% as my official outlook with an outside chance of 3.6%. My own rate of inflation is 2.7%, primarily due to my very limited driving. 

Of course there are some that think the R-CPI-E should be used, but note the 3.3% y/y rise in that index. It would likely land at 3.4% y/y. 

The underlying argument for the R-CPI-E is the current 366.138 basket, compared to the CPI-W's 328.481, OR the headline CPI-U number of  334.980. All of which list the same timeframe for 100. My problem with the R-CPI-E has been it lagging the past few years. My old article on this.

Sorry, there is no magical formula, nor are the heroes of the Marvel Universe going to spring to life and rescue all of us. 

The latest petroleum inventories (Sep-10-2026)

Inventories moved up across the board, as the total of all products increased 5+MB. The SPR decreased about 1.2MB. Originally, 172M barrels were slated to be pulled, AND within 5 months(?). 129.8 Million barrels have been pulled and the drawdown has slowed significantly. 

Gasoline consumption contines to decline on both y/y and m/m.

Gasoline prices are edging up, but the story is still about diesel, imo. Diesel is set to blow past the near $6 mark towards the $7 mark nationally, and hold your breath California... from current near $8, to near $9 per gallon. Much of this was explained in my previous post. 

Stay tuned.