US Inflation data for the month of August will be published tomorrow. It is expected that headline #cpi will increase 0.6% MoM, for a 3.6% YoY change. There are several reasons for this increase, among them, the base effect, where the second half of last year showed a decrease in prices as the fed was tightening rates. Another reason, is the recent spike in the price of crude oil, that passes through the economy as higher gasoline prices. Behind that spike is a rapid fall in oil inventories, shown below, including the strategic petroleum reserves, which were depleted during and after Covid, and so far, haven’t reached normal levels. Since The recent bottom on price in May, crude oil price has increased 32%, and geopolitical tensions are making it more difficult for it to go down. The Saudis have extended the production cuts, #russia, #iran and #venezuela are tough choices to buy oil from directly, and that’s why the US has been triangulating purchases through #India. That’s also why the G20 conference was so important, to strengthen the relationahip with potential oil sellers. Crude oil above $100 can be next.
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