By: David Scutt, Market Analyst
Downstream energy pressure is now running about 51% above its prior two-year norm, and it has stayed more than 30% above that benchmark for six straight months. Episodes of that length are rare, and in the four completed cases with comparable persistence, core inflation momentum was higher in the months that followed. Gasoline sits roughly 40% above its prior 24-month average and diesel around 62% higher, while West Texas Intermediate crude is up only about 16%, so the pressure is concentrated downstream rather than in the barrel itself. The gap traces back to disruption from the war in the Middle East making it harder to get crude to refiners.
David Scutt is a StoneX Media Senior Market Analyst covering global macro markets, with more than a decade spent as a foreign exchange spot, forwards and money markets dealer inside bank treasury, managing interest rate and liquidity risk. He produces technical and fundamental analysis across foreign exchange, commodities and equity indices, the three markets where a fuel driven inflation impulse and a repricing of the Federal Reserve rate path show up first.
Only four completed episodes match the current stretch of downstream energy pressure, and the record across them leans one way. Isolating the energy side of the equation is a deliberate narrowing, because economic conditions, productivity, underlying growth and the policy backdrop differ from one period to another. Within that narrow lens, David Scutt sets out the pattern, "in three of the four completed episodes, where downstream energy pressure remained unusually elevated for this long, the average monthly pace of core CPI was higher over the following six months", and on a three-month annualized basis momentum was higher three months later in all four. For a trader sizing exposure to U.S. inflation prints, that is a small sample rather than a rule, evidenced by the handful of comparable periods available. It is still the closest thing to a base rate the energy channel offers.
Persistence, not severity, is what converts a fuel cost into a consumer price. Energy keeps the cogs of commerce moving, so freight, logistics and delivery costs absorb the first move, and corporate margins absorb the second. The transmission is gradual rather than mechanical, which is precisely why a six-month run above the benchmark carries more weight than a sharper move that fades in weeks. According to Scutt, "businesses can absorb higher fuel, freight and logistics costs for a while through margins, but the longer those pressures persist, the harder that becomes, increasing the likelihood that more of the increase gets passed further down the chain and ultimately reaches the consumer".
--- Written by Frédéric Guétin, StoneX Media Producer
--- Expert: David Scutt, StoneX Media Senior Market Analyst
StoneX TV content is created, produced, and distributed solely by StoneX Media Ltd (“StoneX TV”) and is provided for informational and educational purposes only.
StoneX TV does not provide investment, financial, legal, or tax advice and does not make any recommendation or endorsement of any investment strategy, transaction, or financial instrument. Nothing in this content constitutes, or should be construed as, investment advice or a recommendation to buy, sell, or hold any financial instrument, including securities, futures, derivatives, digital assets, foreign exchange products, or CFDs.
This content does not constitute an offer, invitation, or solicitation to engage in any investment activity.
The information presented is general in nature and is not tailored to the financial situation, investment objectives, or risk tolerance of any specific person. You should not rely on this content as a substitute for independent professional advice.
Investing and trading in financial instruments involves significant risk of loss and is not suitable for all investors. Past performance is not indicative of future results.
Any views or opinions expressed are those of the presenter at the time of publication and are subject to change without notice. Such views may not necessarily reflect those of StoneX Media Ltd or its affiliates. StoneX Media Ltd and its affiliates, including StoneX Group Inc., may from time to time have positions in, or engage in transactions involving, the financial instruments referenced.
This content may include general market commentary and opinion. It does not constitute independent investment research and has not been prepared in accordance with legal requirements designed to promote the independence of investment research.
StoneX Media Ltd is not authorised or regulated to provide investment services and does not act in a fiduciary capacity.
StoneX Media Ltd is incorporated in Ireland and operates in accordance with applicable Irish law. It is a wholly owned subsidiary of StoneX Group Inc. and is a separate legal entity from other subsidiaries within the StoneX Group, which may be regulated in various jurisdictions. StoneX Media Ltd does not act on behalf of, or provide services for, any regulated affiliate.
This content is not directed at, and may not be distributed to, any person in any jurisdiction where such distribution would be contrary to local laws or regulations.
Supporting documentation for any claims, comparisons, statistics, or technical data may be made available upon reasonable request, where applicable.
Our subscribers have access to comprehensive market analysis from StoneX spanning commodities, equities, currencies and more.
A conflict-driven bid in crude is no longer just an energy story, because a rising geopolitical risk premium travels straight into inflation expectations. Fiona Cincotta unpacks how that premium reaches bond yields, central bank policy and risk assets.
September 9 – Nearby Brent crude oil futures have broken above $100 for the first time in over six weeks amid fresh escalations targeting energy assets in both the Middle East and Black Sea. A tit-for-tat cycle of strikes on vessels in and around the Strait of Hormuz has persisted in recent days, with CENTCOM reporting U.S. strikes having destroyed five Iranian crude oil tankers yesterday, then Iran escalating overnight, claiming attacks on two U.S. naval vessels and eight oil tankers in the Gulf, though that has not yet been verified by the U.S. What stood out to me regarding yesterday’s strikes was the targeting of an Iranian oil tanker near the anchorage area of Kharg Island, Iran’s primary oil export hub. The proximity of this strike to Kharg Island could be interpreted as a deliberate warning: Washington is demonstrating its ability to hit Iran’s oil-export system at the doorstep of the country’s principal crude terminal while, for now, stopping short of targeting the infrastructure itself. At the same time, Ukraine carried out heavy strikes on Russia’s Novorossiysk, the country’s top Black Sea port for commodity shipment. While confirmed details are still sparse, the Russian naval base in the area appears to have been the top target, with energy terminals damaged as well, but no damage to grain infrastructure has been reported at this time. On the other side, Russia continued their campaign of heavy strikes across Ukraine, including an ongoing focus on Black Sea port cities, with Mykolaiv reportedly suffering notable damage. The other notable target was the border crossing from Ukraine into Moldova at Starokozache, highlighting Russia’s new campaign targeting alternate routes for Ukrainian grain shipments amid the effective closure of the Black Sea. Both wars are increasingly becoming wars against commodity logistics, keeping support under the broader complex as traders await what comes next.
September 8 – Geopolitical escalation remains in focus to start the short week, with stock futures pointing to a mixed open and WTI crude oil prices posting a fresh three-month high amid a ramp-up in fighting in both the Middle East and Black Sea. The VIX is up notably from its 2026 low posted on Friday but remains relatively muted as it trades above the 15.4 level. The dollar is quietly lower to start the day, hovering around 98.84 at the time of writing. Treasury yields are also quietly lower to start the day, with the sharpest declines seen at the long-end of the curve; 2-year yields are trading at 4.37%, 10-year yields at 4.77%, and 30-year yields at 5.225%. Nearby WTI pushed to its highest level in exactly three months earlier in the session but has since pulled back to trade near $92.90, up ~1.8% on the day, while nearby Brent pushed to its highest level since July 24th earlier in the session but has pulled back to trade near $97.50 at the time of writing, up only ~0.4%. The ags are widely mixed, with the biggest strength being seen in the wheat complex after weekend talks failed to produce any major results, which we’ll dive into in more depth below.
Our market expertise, advanced platforms, global reach, culture of full transparency and commitment to our clients’ success all set us apart in the financial marketplace.
Reach
With access to 40+ derivatives exchanges, 180+ foreign exchange markets, nearly every global securities marketplace and numerous bi-lateral liquidity venues, StoneX’s digital network and deep relationships can take clients anywhere they want to go.
Transparency
As a publicly traded company meeting the highest standards of regulatory compliance in the markets we serve; our financials and record of accomplishment are matters of public record. StoneX’s commitment to “doing the right thing over the easy thing” sets us apart in the industry and helps us build respect, client trust and new partnerships.
Expertise
From our proprietary Market Intelligence platform, to “boots on the ground” expertise from award-winning traders and professionals, we connect our clients directly to actionable insights they can use to make more informed decisions and achieve their goals in the global markets.
