- US 30-year yields climbed six basis points to 5.72% and 10-year yields rose to 5.35% as crude above $100 revived inflation and central-bank rate-hike concerns, with the move spilling into Europe and pushing UK 30-year gilts back to 6%.
- The EIA's Winter Fuels Outlook projects heating oil at an average $5.26 a gallon this winter, up 34% year over year, translating to $2,115 in household spending, 21% more than last winter.
- Tight global diesel and distillate supplies, worsened by refinery disruptions in Russia and the Middle East and reduced Chinese fuel exports, are keeping distillate prices elevated and some analysts expect them to stay high through 2027.
- The heating-oil shock is concentrated in the Northeast, home to roughly 3.4 million of the nation's 4.1 million heating-oil households; state surveys show Massachusetts prices up about 73% and Maine up roughly 79% year over year.
- Households heating with natural gas are projected to spend $640 this winter, down 9%, while propane users spend $1,246, down 3%, and electric-heat households spend $1,196, up 4%.
- Emerging-market stocks halted their advance and EM currency returns declined as the Middle East flare-up boosted oil and the dollar.
Quotes
“The consumer, unfortunately, is going to be facing some severe sticker shock when the delivery company fills up their tank to get ready for the colder weather”
“Shopping around does pay off”
“There's a lot of concern about people on fixed incomes”
“US Treasuries resumed their retreat, lifting the 30-year yield back to its highest since 2002 as climbing oil prices raised concern about faster inflation and more central bank interest-rate increases.”