October’s jobs report; September’s trade deficit. construction spending, factory inventories, and JOLTS

Major economic reports that were released last week included the Employment Situation Summary for October and the Job Openings and Labor Turnover Survey (JOLTS) for September, both from the Bureau of Labor Statistics, and three September reports that revised metrics which were only estimated in last week’s release of 3rd quarter GDP: the Commerce Department’s report on our International Trade for September, the September report on Construction Spending (pdf) and the Full Report on Manufacturers’ Shipments, Inventories and Orders for September, both from the Census Bureau….

The week also saw the Consumer Credit Report for September from the Fed, which reports on non-real estate consumer borrowing, and which indicated consumer credit outstanding grew by a seasonally adjusted $27.8 billion in June, or at a 6.4% annual rate, as non-revolving credit grew at a 3.6% rate to $3,856.0 billion, while revolving credit outstanding grew at a 14.5% rate to $1,368.5 billion…For the third quarter, consumer credit increased at a seasonally adjusted 4.2% rate, as revolving credit increased at a 4.1% annual rate, while nonrevolving credit increased at a 4.2% annual rate….

Privately issued reports included the ADP Employment Report for October, which indicated an increase of 86,000 private sector jobs for the month, the light vehicle sales report for October from Wards Automotive, which estimated that vehicles sold at a 15.54 million annual rate in October, down from the 16.39 million annual sales rate reported for September, and down 0.9% from the 15.68 million annual sales rate of October a year ago, and both of the widely watched purchasing manager’s survey from the Institute for Supply Management (ISM): the October Manufacturing Report On Business indicated that the manufacturing PMI (Purchasing Managers Index) rose to 55.5% in October, up from 54.5% in September, which indicates that a larger plurality of manufacturing purchasing managers reported improving metrics for several facets of their businesses in October than a month earlier, while the October 2026 Services Report On Business reported their Services PMI slipped to 54.5%, down from 54.9% in September, indicating that a smaller plurality of service industry purchasing managers reported improvement in various facets of their business in October than the month before…

Employers Added 165,000 Jobs in October, Unemployment Rate Fell to 4.1%

The Employment Situation Summary for October indicated an increase in payroll jobs that far exceeded expectations, that the unemployment rate fell on a decrease in the unemployed, and that the labor force participation rate and the employment rate were both higher as more people joined the labor force and found work.…estimates extrapolated from the seasonally adjusted establishment survey data projected that employers added 165,000 jobs in October, after the previously estimated payroll job change for September was revised from an increase of 29,000 jobs to one of 60,000 jobs, and the payroll jobs increase for August was revised from 133,000 to 186,000, revisions which mean that this report actually shows 249,000 more payroll jobs than were reported last month, far exceeding forecasts for a 59,000 payroll job increase….meanwhile, the unadjusted data shows that there were actually 1,023,000 more payroll jobs extent in October than in September, as the normal seasonal job increases in the education and retail-related sectors were washed out of the headline number by the seasonal adjustment…

Seasonally adjusted job increases in October were spread through the goods producing and the service sectors, and in state government, while modest job losses were seen in accommodation and food services, and in wholesale trade…since the BLS summary of the job gains by sector is clear and as detailed as our usual synopsis, we’ll just quote from that summary here:

• Total nonfarm payroll employment rose by 165,000 in October, higher than the average monthly gain of 48,000 over the prior 12 months. In October, employment increased in professional and business services, in health care, and in transportation and warehousing. (See table B-1.)
• Employment in professional and business services increased by 70,000 in October, well above the average monthly gain of 15,000 over the prior 12 months. In October, employment continued to trend up in professional, scientific, and technical services (+33,000), in administrative and support and waste management and remediation services (+28,000), and in management of companies and enterprises (+9,000). Professional and business services has added 269,000 jobs since a recent low in October 2025.
• Health care added 42,000 jobs in October, higher than the average monthly gain of 31,000 over the prior 12 months. In October, employment gains occurred in hospitals (+16,000), home health care services (+11,000), and outpatient care centers (+5,000).
• In October, transportation and warehousing added 25,000 jobs, reflecting growth in couriers and messengers (+17,000) and air transportation (+4,000). Transportation and warehousing has added 104,000 jobs since a recent employment low in February, with couriers and messengers (+71,000) contributing most of the gain.
• Manufacturing employment continued to trend up in October (+19,000) and has increased by 101,000 since a recent low in December 2025. In October, job gains occurred in computer and electronic product manufacturing (+7,000), machinery manufacturing (+4,000), and primary metal manufacturing (+4,000).
• Employment showed little change over the month in other major industries, including mining, quarrying, and oil and gas extraction; construction; wholesale trade; retail trade; information; financial activities; social assistance; leisure and hospitality; other services; and government.

The establishment survey also showed that average hourly pay for all employees rose by 14 cents an hour to $38.00 an hour in October, after increasing by a revised 10 cents an hour in September, and is now up 3.1% over the past year; meanwhile, the average hourly earnings of production and nonsupervisory employees increased by 12 cents an hour to $32.75 an hour…employers also reported that the average workweek for all private payroll employees was unchanged at 34.4 hours, while hours for production and non-supervisory personnel was down by a tenth of an hour at 33.8 hours…at the same time, the manufacturing workweek was unchanged at 40.5 hours, while average factory overtime rose by 0.1 hour to 3.1 hours…

Meanwhile, the October household survey indicated that the seasonally adjusted extrapolation of those who would report being employed rose by an estimated 463,000 to 163,615,000, while the estimated number of those unemployed and looking for work decreased by 41,000 to 7,068,000; and hence the labor force increased by a rounded net of 421,000….since the working age population had grown by 128,000 over the same period, that meant the number of employment aged individuals who were not in the labor force fell by a rounded 293,000 to 104,999,000….the increase in the labor force was enough to raise the labor force participation from 61.8% to 61.9%, even as it was still down from 62.5% in September of last year (there’s no figure for last October due to the govt shutdown)…in addition, the increase in number employed was enough to raise the employment to population ratio, which we could think of as an employment rate, from 59.2% in September to 59.3% in October, which was also down from 60.2% a year earlier…meanwhile, the decrease in the number unemployed against a rising labor force was enough to lower the unemployment rate as a percentage of the labor force from 4.2% in September to 4.1% in October…however, the number of those who reported they were forced to accept just part time work rose by 339,000, from 4,501,000 in September to 4,840,000 in October, which was apparently enough to boost the alternative measure of unemployment, U-6, which includes those “employed part time for economic reasons”, to 7.9% of the labor force in October, up from 7.6% in September…

Like most reports from the Bureau of Labor Statistics, the employment situation press release itself is easy to read and understand, so you can get more details on these two reports from there…note that almost every paragraph in that release points to one or more of the tables that are linked to on the bottom of the release, and those tables are also on a separate html page here that you can open it along side the press release to avoid the need to scroll up and down the page..

Job Openings, Hiring, and Job Quitting Rose in September; Layoffs Fell

The Job Openings and Labor Turnover Survey (JOLTS) report for September from the Bureau of Labor Statistics estimated that seasonally adjusted job openings rose by 333,000, from 7,190,000 in August to 7,523,000 openings in September, after August’s job openings were revised 145,000 lower, from 7,335,000 to 7,190,000…September jobs openings were also 4.9% higher than the 7,169,000 job openings reported for September a year ago, as the job opening ratio expressed as a percentage of the employed rose from 4.3% in August to 4.5% in September, and was also up from 4.3% in September a year ago…the largest percentage job opening changes included a 25,000 job opening increase to 111,000 openings in information, a 23,000 job opening increase to 75,000 openings in real estate and rental and leasing, and a 42,000 openings decrease to 289,000 job openings in finance and insurance (see table 1 for more details)…like most BLS releases, the press release for this report is easy to understand and also refers us to the associated table for the data cited, which are then linked to at the end of the release…

The JOLTS release also reports on labor turnover, which consists of hires and job separations, which in turn is further divided into layoffs and discharges, those who quit, and ‘other separations’, which includes retirements and deaths….in September, seasonally adjusted new hires totaled 5,402,000, up by 131,000 from the revised 5,271,000 who were hired or rehired in August, as the hiring rate as a percentage of those employed rose from 3.3% in August to 3.4% in September, and was also up from the 3.3% hiring rate of September a year earlier (details of hiring by sector since March are in table 2)….meanwhile, total separations rose by 144,000, from 5,175,000 in August to 5,319,000 in September, while the separations rate as a percentage of the employed was unchanged at 3.3% in September, and it was also unchanged from 3.3% in September a year ago (see table 3)…subtracting the 5,319,000 total separations from the total hires of 5,402,000 would imply an increase of 82,000 jobs in September, somewhat more than the revised payroll job increase of 60,000 jobs for September reported in the October establishment survey later in the week, but well within the expected +/-110,000 margin of error in these incomplete survey extrapolations…..

Breaking down the seasonally adjusted job separations, the BLS finds that 3,365,000 of us voluntarily quit our jobs in September, up by 321,000 from the revised 3,044,000 who quit their jobs in August, while the quits rate, widely watched as an indicator of worker confidence, rose from 1.9% in August to 2.1% in September, and was also up from 1.9% in September a year earlier (see details in table 4)….in addition to those who quit, another 1,641,000 employees were either laid off, fired or otherwise discharged in September, down by 127,000 from the revised 1,768,000 who were discharged in August, as the discharges rate fell from 1.1% to 1.0% of all those who were employed during the month, which was also down from the discharges rate of 1.1% a year earlier….meanwhile, other separations, which includes retirements and deaths, were at 313,000 in September, down from 363,000 in August, for an ‘other separations rate’ of 0.2%, which was the same as in August and as in September of last year….both seasonally adjusted and unadjusted details by industry and by region on hires and job separations, and on job quits and discharges can be accessed using the links to tables at the bottom of the press release…

Trade Deficit Fell 0.7% in September on Higher Prices for Food & Fuel Exports

Our trade deficit fell 0.7% in September as the value of our exports increased a bit more than the value of our imports did…the Commerce Dept report on our international trade in goods and services for September indicated that our seasonally adjusted goods and services trade deficit fell by a rounded $0.7 billion to $105.0 billion in September, from a revised August trade deficit of $105.7 billion, which had previously been reported at $105.6 billion…the value of our exports rose by a rounded $5.8 billion to $321.5 billion, on a $5.1 billion increase to $211.0 billion in our exports of goods, and an increase of $0.7 billion to $110.5 billion in our exports of services, while our imports rose by a rounded $5.2 billion to $426.6 billion, on a $4.4 billion increase to $346.9 billion in our imports of goods, and an $0.8 billion increase to $79.7 billion in our imports of services… prices for our exports averaged 2.2% higher in September, which means that the increase in our exports was due to higher prices and that our real exports likely fell by about 0.3%, while import prices were 1.1% higher, similarly meaning that most of the increase in our imports was due to higher prices and that our real imports probably only rose about 0.1%…

The news release for this month’s report gives us a brief synopsis of Exhibits 7 and 8 in the Full Release and Tables pdf for August, which details the major reasons for the increases in our exports and in our imports:

Exports of goods increased $5.1 billion to $211.0 billion in September.

  Exports of goods on a Census basis increased $5.0 billion.

• Capital goods increased $3.8 billion.
  • Computers increased $1.3 billion.
  • Computer accessories increased $0.8 billion.
  • Civilian aircraft increased $0.7 billion.
• Foods, feeds, and beverages increased $1.9 billion.
  • Soybeans increased $1.3 billion.
• Consumer goods increased $0.8 billion.
  • Pharmaceutical preparations increased $0.7 billion.
• Industrial supplies and materials decreased $1.0 billion.
  • Nonmonetary gold decreased $3.4 billion.
  • Crude oil increased $1.2 billion.

  Net balance of payments adjustments increased $0.1 billion.

Imports of goods increased $4.4 billion to $346.9 billion in September.

  Imports of goods on a Census basis increased $8.0 billion.

• Capital goods increased $11.6 billion.
  • Computers increased $7.6 billion.
  • Computer accessories increased $5.7 billion.
  • Semiconductors decreased $1.2 billion.
• Consumer goods increased $2.4 billion.
  • Pharmaceutical preparations increased $2.9 billion.
• Industrial supplies and materials decreased $3.7 billion.
  • Nonmonetary gold decreased $2.7 billion.
  • Crude oil decreased $1.3 billion.

  Net balance of payments adjustments decreased $3.6 billion.

That News Release for this month’s report also summarizes Exhibit 19 in the full release, which gives us surplus and deficit details on our goods trade with selected countries:

The September figures show surpluses, in billions of dollars, with Netherlands ($7.7), South and Central America ($6.2), United Kingdom ($3.0), Hong Kong ($2.5), Australia ($2.1), Brazil ($1.1), Singapore ($0.7), Saudi Arabia ($0.5), and Belgium ($0.2). Deficits were recorded, in billions of dollars, with Mexico ($28.7), Vietnam ($25.3), Taiwan ($21.9), China ($17.9), European Union ($14.2), South Korea ($12.2), Germany ($7.9), Italy ($6.3), Malaysia ($5.3), Japan ($4.8), India ($4.5), Canada ($4.4), Ireland ($3.0), Switzerland ($1.3), France ($1.3), and Israel ($0.7).

• The deficit with Taiwan increased $3.6 billion to $21.9 billion in September. Exports increased $0.6 billion to $5.3 billion and imports increased $4.2 billion to $27.3 billion.
• The deficit with the European Union increased $3.2 billion to $14.2 billion in September. Exports decreased $0.6 billion to $39.0 billion and imports increased $2.6 billion to $53.2 billion.
• The deficit with Canada decreased $2.7 billion to $4.4 billion in September. Exports decreased $0.3 billion to $29.7 billion and imports decreased $3.0 billion to $34.1 billion.

In last week’s advance report on 3rd quarter GDP, the contribution to GDP from September’s trade in goods was estimated based on the sketchy Advance Report on our International Trade in Goods which was released a day before the GDP release…that report estimated that our seasonal adjusted goods trade deficit was at $134,904 million inSeptember on a Census basis, up from the $132,069 million goods deficit in August, on goods exports valued at $209,244 million and goods imports valued at $344,148 million…Exhibit 5 in this report revises that estimate and shows that our actual goods trade deficit in September was $135,991 million on a balance of payments basis, and $135,081 million on a Census basis, on Census adjusted goods exports of $209,115 million and Census adjusted goods imports of $344,197 million…in addition, the Census basis August goods trade deficit was revised from $132,069 million to $132,127 million…together, those revisions from the previously published data mean that the 3rd quarter trade deficit in goods was on the order of $235 million more than was included in last week’s GDP report, or roughly $0.95 billion on an annualized basis, which would mean that the 3rd quarter’s GDP should be revised about about 0.02 percentage points lower when the 2nd estimate of GDP is released at the end of November…

For our trade in services, the BEA’s Key source data and assumptions (xls) for the advance estimate of third quarter GDP provides aggregate exports and imports of services at annual rates on an international-transactions-accounts basis, indicating that the BEA assumed a $11.5 billion increase in exports of services and a $5.3 billion increase in imports of services on an annual rate basis in September when computing 3rd quarter GDP….while there is no comparable annualized metric or adjusted data in this trade report that we could directly compare that to, this release does show that exports of services increased by $727 billion in September after August’s exports of services were revised $294 million higher, and that imports of services increased $752 million in September after August’s imports of services were revised $404 million lower…after multiplying those monthly figures by 12 to crudely approximate an annualized change, that suggests that the annual rate for September exports of services used in the GDP report was on the order of $0.75 billion too low, while the annual rate for September imports of services used in the GDP report was about $1.1 billion too high…applying those annualized differences, and also crudely annualizing the services trade revisions for August vis a vis those reported in the GDP report in the same manner, the annual rate for 3rd quarter services exports would be revised about $1.9 billion higher, while the revision in the annual rate for 3rd quarter services imports would be revised about $2.7 billion lower…combined, the resulting upward revision of $3.8 billion, at an annual rate, to our total services surplus in NIPA terms would add about 0.06 percentage point to our 3rd quarter GDP….combined with our underestimated goods deficit, then, it appears that this report could add about 0.04 percentage points to 3rd quarter GDP when the 2nd estimate revisions are released on November 29th…

Construction Spending Fell 1.9% in September, Revisions have Negligible Impact on 3rd Quarter GDP

The Census Bureau’s report on construction spending for September(pdf) estimated that the month’s seasonally adjusted construction spending would work out to $2,186.1 billion annually if extrapolated over an entire year, which was 1.9 percent (±0.7 percent) below the revised annualized August estimate of $2,227.4 billion, and 4.6 percent (±1.6 percent) above the estimated annualized level of construction spending in September of last year…the annualized August construction spending estimate was revised about 1.1% higher, from $2,203.1 billion to $2,227.4 billion, while the annual rate of construction spending for July was revised fractionally lower, from $2,184.5 billion to $2,184,026 billion, which combined meant that the 0.9% increase in spending that was reported for August a month ago was revised to a 2.0% increase….for the first nine months of this year, construction spending amounted to $1,649.6 billion, which was $1,621.4 billion, 2.9 percent (±1.0 percent) below the $1,698.6 billion spent on construction over the same period in 2025…

A further breakdown of the different subsets of construction spending is provided in a Census summary, which precedes the detailed spreadsheets:

• Private Construction -Spending on private construction was at a seasonally adjusted annual rate of $1,639.3 billion, 2.4 percent (±0.5 percent) below the revised August estimate of $1,680.3 billion. Residential construction was at a seasonally adjusted annual rate of $848.8 billion in September, 5.5 percent (±1.3 percent) below the revised August estimate of $898.0 billion. Nonresidential construction was at a seasonally adjusted annual rate of $790.6 billion in September, 1.1 percent (±0.5 percent) above the revised August estimate of $782.3 billion.
• Public Construction-  In September, the estimated seasonally adjusted annual rate of public construction spending was $546.8 billion, 0.1 percent (±1.3 percent)* below the revised August estimate of $547.1 billion. Educational construction was at a seasonally adjusted annual rate of $113.1 billion, virtually unchanged from (±1.3 percent)* the revised August estimate of $113.1 billion. Highway construction was at a seasonally adjusted annual rate of $149.2 billion, 0.3 percent (±3.6 percent)* below the revised August estimate of $149.7 billion.

Construction spending for July and September was lower than was indicated in the advance 3rd quarter GDP report released last week, while spending  for August was higher. The BEA’s key source data and assumptions (xls) that accompanied the advance 3rd quarter GDP report indicates that they had estimated that September’s residential construction would increase by an annualized $0.6 billion from the previously published August figures, that nonresidential construction would increase by an annualized $7.8 billion from last month’s report, and that September’s public construction would decrease by an annualized $3.7 billion from last month’s report….hence, the total of the figures used by the BEA for total September construction in the 3rd quarter GDP report were a net $6.4 billion higher than the previously published August figure…since this report indicates that September construction spending was down by $41.2 billion from an August figure that was revised $24.3 billion higher, that means that the net of the September construction figures used in the GDP report were a total of $23.3 billion too high…averaging that overestimation with the $24.3 billion upward revision to August construction spending and the $0.5 billion downward revision to July’s construction spending means the aggregate annualized nominal construction figures used in the 3rd quarter GDP report were roughly $0.17 billion too low, which would suggest there’d be a negligible positive impact on 3rd quarter GDP to account for what this construction spending report shows…(note: that could be off by a bit if there’s a large shift in the inflation adjustments among the revised construction figures)

Factory Shipments Rose 0.9% in September, Factory Inventories Rose 0.3%

The Full Report on Manufacturers’ Shipments, Inventories, & Orders (pdf) for September from the Census Bureau reported that the seasonally adjusted value of new orders for manufactured goods rose by $12.2 billion or 1.8 percent to $677.2 billion in September, following an increase of 0.3% to $665.0 billion in August, which was revised from the 0.1% increase to $663.5 billion that was reported for August last month….however, since the Census Bureau does not even collect data on new orders for non durable goods for this widely watched “factory orders report”, both the “new orders” and “unfilled orders” sections of this report are really only useful as revised updates to the September advance report on durable goods we reported on last week…on those durable goods revisions, the Census Bureau’s own summary, which precedes their detailed spreadsheet of the metrics included in this report, is quite clear and complete, so we’ll just quote directly from that summary here:

• Summary: Summary New orders for manufactured goods in September, up three consecutive months, increased $12.2 billion or 1.8 percent to $677.2 billion, the U.S. Census Bureau reported today. This followed a 0.3 percent August increase. Shipments, up eleven of the last twelve months, increased $8.8 billion or 1.3 percent to $668.5 billion. This followed a 0.1 percent August increase. Unfilled orders, up twenty-six of the last twenty-seven months, increased $13.8 billion or 0.9 percent to $1,623.8 billion. This followed a 0.6 percent August increase. The unfilled orders-to-shipments ratio was 6.84, down from 6.86 in August. Inventories, up twelve consecutive months, increased $3.7 billion or 0.4 percent to $976.0 billion. This followed a 0.5 percent August increase. The inventories-to-shipments ratio was 1.46, down from 1.47 in August.
• New Orders for manufactured durable goods in September, up six of the last seven months, increased $6.5 billion or 1.9 percent to $345.7 billion, up from the previously published 1.8 percent increase. This followed a 0.1 percent August increase. Transportation equipment, up two of the last three months, led the increase, $5.3 billion or 4.6 percent to $119.9 billion. New orders for manufactured nondurable goods increased $5.8 billion or 1.8 percent to $331.6 billion.
• Shipments of manufactured durable goods in September, up nine of the last ten months, increased $3.1 billion or 0.9 percent to $336.9 billion, unchanged from the previously published increase. This followed a 0.2 percent August decrease. Transportation equipment, also up nine of the last ten months, led the increase, $1.6 billion or 1.5 percent to $111.2 billion. Shipments of manufactured nondurable goods, up nine of the last ten months, increased $5.8 billion or 1.8 percent to $331.6 billion. This followed a 0.5 percent August increase. Petroleum and coal products, up eight of the last nine months, led the increase, $3.7 billion or 5.2 percent to $75.0 billion.
• Unfilled Orders for manufactured durable goods in September, up twenty-six of the last twenty-seven months, increased $13.8 billion or 0.9 percent to $1,623.8 billion, up from the previously published 0.8 percent increase. This followed a 0.6 percent August increase. Transportation equipment, up thirteen of the last fourteen months, led the increase, $8.7 billion or 0.9 percent to $1,019.0 billion.
• Inventories of manufactured durable goods in September, up twelve consecutive months, increased $2.1 billion or 0.3 percent to $610.4 billion, unchanged from the previously published increase. This followed a 0.5 percent August increase. Transportation equipment, up eleven of the last twelve months, led the increase, $0.8 billion or 0.4 percent to $193.3 billion. Inventories of manufactured nondurable goods, up seven of the last eight months, increased $1.7 billion or 0.5 percent to $365.7 billion. This followed a 0.5 percent August increase. Petroleum and coal products, up three consecutive months, led the increase, $1.2 billion or 2.5 percent to $50.2 billion. By stage of fabrication, September materials and supplies increased 0.4 percent in durable goods and 0.2 percent in nondurable goods. Work in process increased 0.5 percent in durable goods and 2.2 percent in nondurable goods. Finished goods were virtually unchanged in durable goods and decreased 0.1 percent in nondurable goods.

The BEA’s key source data and assumptions (xls) for 3rd quarter GDP indicates that they had estimated that the value of non-durable goods inventories would increase by $1.5 billion on a Census basis in September before they estimated the 3rd quarter’s output, so the actual $1.7 billion increase reported here would result in a revision to GDP that could increase the third quarter’s growth rate by 0.01 or 0.02 percentage points…

(the above is the synopsis that accompanied my regular Sunday morning news links emailing, which in turn was mostly selected from my weekly blog post on the global glass onion…if you’d be interested in receiving my weekly emailing of selected links, most of which are chosen from the aforementioned GGO posts, contact me…)

US oil stores at 43 year low; distillate stores at 23½ year low, 22.3 days worth remain; highest October refinery use since ‘97

largest oil price drop in 7 months; US oil well output at a record high; Strategic Petroleum Reserve at the lowest since October 15, 1982; total of all US oil supplies, including commercial, is the lowest since October 7th, 1983; total US stocks of crude oil and petroleum products ​a​re at the lowest level since May 9th, 2003; highest US refinery utilization in any October since 1997; most barrels refined for any October week in U.S. history; US  distillates​ ​supplies a​re the lowest since May 2nd 2003​; demand for distillates at a 37 week high, leaving  22.3 days supply of distillate fuel remaining

US oil prices finished lower for the first time in five weeks as the market ignored blazing oil tankers​ in the Strait of Hormuz, falling​ oil & product inventories ​in the US, and other bullish fundamentals and assumed that the midterm election results somehow meant the war in Iran was over and global oil flows would be restored…after rising 0.8% to a six month high of $104.12 a barrel last week after Houthi missiles struck Saudi Arabia’s main oil export hub and a couple of their largest refineries, while oil tankers were exploding and catching fire while trying to transverse the Strait of Hormuz, the contract price for the benchmark US light sweet crude for December delivery fell more than 4% during Asian trading on Monday, as traders reacted to reports of diplomatic talks between Iranian and Qatari officials aimed at ending the ongoing US-Israeli war on Iran, and was down 6% in early US trading as talks between Iranian negotiators and Qatari mediators sparked hopes for a diplomatic deal to halt the U.S.-Israeli military campaign against Iran, and settled $7.66 lower at $96.46 a barrel after Washington and Tehran both signaled they would give diplomacy a chance, wiping out part of the war premium that had lifted prices through October….however, oil prices rose in early Asian trading on Tuesday after the United States struck sites on Iran’s Qeshm Island, reviving fears of an escalation of the conflict and prolonged disruptions to energy supplies from the Middle East, but were falling again by early evening in the Middle East after US officials described the attacks as defensive measures aimed at preventing Iran from targeting commercial vessels in the strait, and continued to fall in volatile trading as markets opened in New York as caution over the outcome of the U.S. midterm election offset fresh geopolitical tensions in the Gulf after the U.S. strike on Iran’s Qeshm Island, and settled 37 cents lower at $96.09 a barrel as the market weighed renewed supply fears after the U.S. struck Iran’s Qeshm Island​ against a statement made by President Donald Trump regarding U.S. military support for Israel…oil prices fell by more than 1% during early trading across Asian markets on Wednesday morning, despite ​a report of a larger-than-expected decline in U.S. crude inventories, as traders awaited the results of the U.S. midterm congressional elections and their potential implications for Middle East peace talks, and were down 2.6% in early US trading as traders weighed the sweeping midterm election wins for Democrats, who could pose wide-ranging challenges to the Trump administration’s war against Iran and other energy policies, then tumbled throughout the session to settle $7.97 lower at $88.12 a barrel, as traders bet ‌that the shift in power could hasten the end of the US-Israeli war with Iran…oil prices fell for a fourth straight session on Australian markets on Thursday, as traders bet that Democrats’ sweeping midterm victories would increase pressure on President Trump to wind down the U.S. war with Iran, but rebounded in early US trading as energy traders responded to the likelihood ​t​hat oil supplies ​would remain vulnerable​, despite potential changes to the trajectory of the Iran war from this week’s U.S. midterm elections, and settled $2.40 higher at $90.52 a barrel as new attacks on tankers in the Persian Gulf fed worries about oil supplies, while traders reassessed the outlook for the US-Israeli war with Iran… oil prices edged higher in Asian trading on Friday, as concerns that the Iran conflict could disrupt oil supplies from the Middle East provided support, and continued to edge higher during the US session, reflecting concerns over possible disruptions to oil shipments through the strategic Strait of Hormuz, and settled 31 cents higher at $90.83 a barrel on renewed fears of further US strikes on Iran, after President Trump said he would soon decide ‌whether to pursue a peace agreement or destroy what remains of Iran, but still ended 12.8% lower for the week, the largest ​one week drop in 7 months…

meanwhile, natural gas prices finished higher for the first time in three weeks, on lower production, rising LNG export demand, and slightly cooler forecasts…after falling 5.0% to $2.898 per mmBTU last week on El Nino driven forecasts for a warmer than normal winter, the price of the benchmark natural gas contract for December delivery opened 4.9 cents higher on Monday but quickly trended lower as short-term forecasts remained bearish, and settled 4.2 cents lower at $2.856 per mmBTU as renewed hope for talks between the US and Iran caused oil and European gas prices to plunge, while lower flows to LNG export terminals added further downward pressure….natural gas prices opened 4.8 cents higher on Tuesday and rose to $2.922 within minutes of the opening bell, then fell to an intraday low of $2.848 at 9:45 AM, as technical trading bumped up against bearish fundamentals, and settled 3.9 cents higher at $2.895 per mmBTU as choppy production readings and bargain buying countered bearish weather forecasts….December natural gas opened 1.1 cents higher on  Wednesday and rose gradually throughout the morning, as bargain buyers found value in the recently diminished contract, and settled 6.4 cents higher at $2.959 per mmBTU as production estimates held at relatively light levels and LNG demand proved durable, offsetting bearish weather patterns and expectations for a hefty ​addition to storage…natural gas prices opened 1.8 cents lower on Tuesday but stabilized to trade sideways near $2.960 for the subsequent hour, then rose to an intraday high of $2.995 at 11:15 AM, following the report of a smaller than anticipated, though historically bearish injection of gas into storage, before pulling back to close the session 1.2 cents lower at $2.947 per mmBTU, as analysts calculated that Lower 48 supply would prove sufficient to meet winter demand…natural gas futures rebounded to over $3.00 early Friday, supported by cooler weather forecast revisions and signs of tightening supply​, despite an exceptionally mild November outlook, but struggled to hold that level despite resurgent LNG feedgas flows, downwardly trending production and modestly cooler forecast trends, and settled 5.1 cents higher at $2.998 per mmBTU as bears gradually released their grip on fundamentals amid hints of heating demand, lower production, and a modest storage surplus, leaving natural gas prices 3.5% higher for the week…

The EIA’s natural gas storage report for the week ending October 30th indicated that the amount of working natural gas held in underground storage rose by 77 billion cubic feet to 3,801 billion cubic feet by the end of the week, which left our natural gas supplies 109 billion cubic feet, or 2.8% below the 3,910 billion cubic feet of gas that were in storage on October 30th of last year, but 54 billion cubic feet, or 1.4% above the five-year average of 3,747 billion cubic feet of natural gas that had typically been in working storage as of the 30th of October over the most recent five years….the 77 billion cubic foot injection into natural gas storage for the cited week was less than the 82 billion cubic foot injection into storage that the market had been expecting ahead of the report, but it was quite a bit more than the 39 billion cubic foot of gas that were injected into natural gas storage during the corresponding week of 2025, and also more than the average 61 billion cubic foot injection into natural gas storage that had been typical for the end of October over the past five years…

The Latest US Oil Supply and Disposition Data from the EIA

US oil data from the US Energy Information Administration for the week ending October 30th showed that despite a big drop of our oil exports, we again had to pull oil from our stored crude supplies for the twenty-fifth time in twenty-eight weeks, and for the 47th time in seventy-five weeks, largely due to a jump in demand for oil that the EIA could not account for…. Our imports of crude oil fell by an average of 1,000 barrels per day to average 6,374,000 barrels per day, after rising by an average of 616,000 barrels per day during the prior week, while our exports of crude oil fell by an average of 1,179,000 barrels per day to average 3,675,000 barrels per day, which, when used to offset our imports, meant that the net of our trade of oil worked out to an import average of 2,699,000 barrels of oil per day during the week ending October 30th, an average of 1,178,000 more barrels per day than the net of our imports minus our exports during the prior week… At the same time, transfers to our oil supplies from Alaskan gas liquids, from natural gasoline, from condensate, and from unfinished oils were 6,000 barrels per day higher than the prior week at 546,000 barrels per day, while during the same week, production of crude from US wells was 11,000 barrels per day higher at a record high of 14,003,000 barrels per day.  Hence, our daily supply of oil from the net of our international trade in oil, from transfers, and from domestic well production appears to have averaged a total of 17,248,000 barrels per day during the October 30th reporting week…

Meanwhile, US oil refineries reported they were processing an average of 16,725,000 barrels of crude per day during the week ending October 30th, an average of 199,000 more barrels per day than the amount of oil that our refineries reported they were processing during the prior week, while over the same period, the EIA’s surveys indicated that an average net of 181,000 barrels of oil per day were being pulled out of the supplies of oil stored in the US… So, based on that reported & estimated data, the crude oil figures provided by the EIA appear to indicate that our total working supply of oil from storage, from net imports, from transfers, and from oilfield production during the week ending October 30th averaged 704,000 more barrels per day than what our oil refineries reported they used during the week.  To account for the difference between the apparent supply of oil and the apparent disposition of it, the EIA just plugged a rounded [ -704,000 ] barrel per day figure onto line 16 of the weekly U.S. Petroleum Balance Sheet, in order to make the reported data for the supply of oil and for the consumption of it balance out, a fudge factor that they label in their footnotes as “unaccounted for crude oil”, thus indicating there must have been an error or omission of that magnitude in the week’s oil supply & demand figures that we have just transcribed….Since 189,000 barrels per day of oil ​supply could not be accounted for in the prior week’s EIA data, that means there was a 893,000 barrel per day difference between this week’s oil balance sheet error and the EIA’s crude oil balance sheet error from a week ago, and hence the changes to supply and demand from that week to this one that are indicated by this week’s report are somehow off by that much, and are therefore largely meaningless.….However, since most oil traders react to the figures in these weekly EIA reports as if they were gospel, and since these weekly figures therefore often drive oil pricing and hence decisions to drill or complete oil wells, we’ll continue to report this data just as it’s published, and just as it’s watched & believed to be reasonably reliable by most everyone in the industry…(for more on how this weekly oil data is gathered, and the possible reasons for that “unaccounted for” oil supply, see this EIA explainer….also see this March 2023 twitter thread from an EIA administrator addressing these ongoing weekly errors, and what they had once hoped to do about it).

This week’s rounded 181,000 barrel per day average decrease in our overall crude oil inventories came as an average of 124,000 barrels per day were being pulled out of our commercial stocks of crude oil, while 57,000 barrels per day were being pulled out of our Strategic Petroleum Reserve, the thirty-first Iran war related withdrawal from the SPR in the past 32 weeks, which left the SPR level at 282,184,000 barrels, the lowest since October 15, 1982, which was during its initial fill-up……with both commercial oil and the SPR inventories down this week, that left the Total of all US Oil Supplies at 691,944,000 barrels, down 20.5% from 870,774,000 barrels on April 17th, and the lowest since September 30th, 1983….

Further details from the weekly Petroleum Data Overview (pdf) indicated that the 4 week average of our oil imports fell to 6,139,000 barrels per day last week, which was still 9.5% more than the 5,605,000 barrel per day average that we were importing over the same four-week period last year, while the four week average of our exports fell to 4,135,000 barrels per day last week, which was 4.9% less than the 4,349,000 barrel per day average that we were exporting last year year at this time… This week’s crude oil production was reported to be 11,000 barrels per day higher at a record 14,003,000 barrels per day as the EIA’s estimate of the output from wells in the lower 48 states was 6,000 barrels per day higher at 13,516,000 barrels per day, while Alaska’s oil production was 5,000 barrels per day higher at 487,000 barrels per day…US crude oil production had reached a pre-pandemic high of 13,100,000 barrels per day during the week ending March 13th 2020, so this week’s reported oil production figure was 6.9% higher than that of our pre-pandemic production peak, and was also 44.4% above the pandemic low of 9,700,000 barrels per day that US oil production had fallen to during the third week of February of 2021.

US oil refineries were operating at 94.5% of their capacity while processing those 16.725,000 barrels of crude per day during the week ending October 30th, up from 92.8% the prior week, and the highest October US refinery utilization rate since 1997, when the Asian financial crisis led to low oil prices and record profits for US refineries….hence the 16,725,000 barrels of oil per day that were refined that week were the most barrels ever refined for any week in the month of October in U.S. history, 9.6% more than the 15,256,000 barrels of crude that were being processed daily during the week ending October 31st of 2025, and 6.1% more than the 15,761,000 barrels that were being refined during the pre-pandemic week ending November 1st, 2019, when our refinery utilization rate was at 86.0%, which was below the pre-pandemic normal utilization rate for this time of year, possibly due to delayed refinery maintenance following the historic flooding across southeast Texas in the wake of Tropical Storm Imelda of that year…

With the increase in the amount of oil that was being refined this week, gasoline output from our refineries also higher, increasing by 463,000 barrels per day to 9,704,000 barrels per day during the week ending October 30th, after our refineries’ gasoline output had decreased by 509,000 barrels per day during the prior week… This week’s gasoline production was still 1.3% less than the 9,831,000 barrels of gasoline that were being produced daily over the week ending October 31st of last year, and 3.3% less than the gasoline production of 10,036,000 barrels per day seen during the prepandemic week ending November 1st, 2019….on the other hand, our refineries’ production of distillate fuels (diesel fuel and heat oil) decreased by 7,000 barrels per day to 5,154,000 barrels per day, after our distillates output had decreased by 71,000 barrels per day during the prior week.  But even after those production decreases, our distillates output was 9.4% more than the 4,709,000 barrels of distillates that were being produced daily during the week ending October 31st of 2025, and 5.7% more than the 4,875,000 barrels of distillates that were being produced daily during the pre-pandemic week ending November 1st, 2019….

Even with this week’s increase in our gasoline production, our supplies of gasoline in storage at the end of the week fell for the twenty-eighth time in thirty-eight weeks, decreasing by 222,000 barrels to 208,958,000 barrels during the week ending October 30th, after our gasoline inventories had increased by 3,870,000 barrels during the prior week.  Our gasoline supplies fell this week because the amount of gasoline supplied to US users rose  by 450,000 barrels per day to 8,808,000 barrels per day, and because our exports of gasoline rose by 172,000 barrels per day to 1,017,000 barrels per day, and because our imports of gasoline fell by 48,000 barrels per day to 351,000 barrels per day… After fifty-eight gasoline inventory withdrawals over the past eighty-nine weeks, our gasoline supplies were 1.4% higer than last October 31st’s gasoline inventories of 206,009,000 barrels, but were about 2% below the five year average of our gasoline supplies for this time of year…

After this week’s decrease in distillates production, our supplies of distillates fell for the nineteenth time in thirty-eight weeks, decreasing by 3,565,000 barrels to 99,259,000 barrels during the week ending October 30th, the lowest since May 2nd 2003, coming after our distillates supplies had decreased by 1,462,000 barrels during the prior week… Our distillates supplies fell by more this week because the amount of distillates supplied to US markets, an indicator of domestic demand, rose by 232,000 barrels per day to a thirty-seven week high of 4,449,000 barrels per day, and because our exports of distillates rose by 21,000 barrels per day to 1,341,000 barrels per day, and because our imports of distillates fell by 40,000 barrels per day to 117,000 barrels per day… After 35 withdrawals from distillates inventories over the past 68 weeks, our distillates supplies at the end of the week were 8.3% below the 112,189,000 barrels of distillates that we had in storage on October 31st of 2025, and were about 13% below the five year average of our distillates inventories for this time of the year…furthermore, the increase in domestic demand, combined with the falling inventories, means that the US only ​has 22.3 days supply of distillate fuel oils remaining heading into winter, when heat oil demand competes with transportation demand for those supplies…​(​NB: the EIA, calculating days of supply with a four week average for demand, indicates 23.8 days of supply, the lowest since March 2003, coming after Hugo Chavez halted tanker exports from Venezuela earlier that year….)

Finally, even with record production from US wells and a big drop in our oil exports, the increase in demand for oil that the EIA could not account for meant our commercial supplies of crude oil in storage fell for the 18th time in twenty-six weeks, for the 29th time over the past year, decreasing by 865,000 barrels over the week, from 410,625,000 barrels on October 23rd to 409,760,000 barrels on October 30th, after our commercial crude supplies had decreased by 1,892,000 barrels over the prior week….After this week’s decrease, our commercial crude oil inventories were about 4% below recent five-year average of commercial oil supplies for this time of year, while they were about 20% above the average of our available crude oil stocks as of the fourth weekend of October over the 5 years at the beginning of the past decade, with the difference between those comparisons arising because it wasn’t until early 2015 that our oil inventories had first topped 400 million barrels. After our commercial crude oil inventories had jumped to record highs during the Covid lockdowns in the Spring of 2020, then jumped again after February 2021’s winter storm Uri froze off US Gulf Coast refining, but then fell sharply due to increased exports to Europe following the onset of the Ukraine war, only to jump again following the Christmas 2022 refinery freeze-offs, changes in our commercial crude inventories had been less extreme up until the onset of the Iran war, when they were initially built up to a three year high by mid-April, before falling to the lowest in nearly eight years by late July…This week’s commercial oil supply decrease was preceded by four larger draws, so as of October 30th our commercial crude inventories were 2.7% below the 421,168,000 barrels of oil we had in commercial storage on October 31st of 2025, and 4.2% less than the 427,658,000 barrels of oil that we had in storage on November 1st of 2024, and 6.0% less than the 435,762,000 barrels of oil we had left in commercial storage on November 3rd of 2023…

With this week’s drop in commercial crude and SPR oil inventories, and distillates supplies, that also meant that the week ended with the total US stocks of crude oil and petroleum products down by 8,581,000 barrels to 1,486,558,000 barrels, the lowest for that total petroleum liquids supply figure since May 9th, 2003…

This Week’s Rig Count

The US rig count was up by one over the week ending November 6th, as the number of rigs targeting oil was up by one and the count of rigs targeting natural gas was up by one, while miscellaneous rigs were down by one…for a quick snapshot of this week’s rig count, we are again including below a screenshot of the rig count summary table from Baker Hughes…in the table below, the first column shows the active rig count as of November 6th, the second column shows the change in the number of working rigs between last week’s count (October 30th) and this week’s (November 6th) count, the third column shows last week’s October 30th active rig count, the 4th column shows the change between the number of rigs running on Friday and the number running on the Friday of the same week of a year ago, and the 5th column shows the number of rigs that were drilling at the end of that reporting period a year ago, which in this week’s case was Friday, the 7tht of November, 2025…

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3rd quarter GDP; September’s income and outlays, durable goods, & new home sales

Major economic reports that were released last week included the 1st estimate of 3rd quarter GDP and the September report on Personal Income and Spending, both from the Bureau of Economic Analysis; other widely watched reports released during the week included the Advance report on durable goods for September and the September report on new home sales, both from the Census bureau, and the Case-Shiller Home Price Index for August from S&P Case-Shiller, an index generated by averaging repeat home sales prices from June, July and August against sales prices of a January 2000 baseline, and which reported that their unadjusted national home price index for those 3 months averaged 0.2% lower than their index generated from May, June and July home sales prices, but still 2.1% higher than their price index generated by repeat home sales prices during the June, July and August period of a year earlier…

This week also saw the release of the Chicago Fed National Activity Index (CFNAI) for September, a weighted composite index of 85 different economic metrics, which increased to +0.07 in September from –0.08 in August, after the August index was revised but netted out to the same –0.08 figure reported for August last month…that left the most often cited 3 month average of the CFNAI at +0.03 in September, up from from a revised +0.01 n August, which, as a positive figure, would indicate that national economic activity has been slightly above the historical trend over the summer months…

In addition, the week also saw the last three regional Fed manufacturing surveys for October: the Kansas City Fed manufacturing survey, covering western Missouri, Colorado, Kansas, Nebraska, Oklahoma, Wyoming and northern New Mexico, reported its broadest composite index fell to +11 October, down from +14 in September, but up from +10 in August, indicating that a modest plurality of that region’s manufacturers continued to report improving business metrics this month; the Richmond Fed Survey of Manufacturing Activity, covering an area that includes Virginia, Maryland, the Carolinas, the District of Columbia and West Virginia, reported its broadest composite index remained at –2 in October, unchanged from September, indicating that a small plurality of that region’s manufacturers again reported slower manufacturing activity this month, while the Dallas Fed Texas Manufacturing Outlook Survey, which covers Texas and adjacent western Louisiana and southeastern New Mexico, reported its general business activity index rose from +9.8 in September to +13.4 in October, indicating that a larger plurality of Texas area manufacturers continued to see improving business metrics in October, even as they also reported that the production index fell 14 points to +15.8, but still remained above its long term series average…

3rd Quarter GDP Grew at a 3.4% Rate on Greater Consumer Spending, Fixed Investment, and Inventories

Our economy grew at a 3.4% rate in the 3rd quarter, somewhat faster than the 2.2% growth rate of the second quarter, as increased consumer outlays for goods and services, growth in private inventories, increased fixed investment, and growth of Federal government consumption and investment were partly offset by decreased exports and increased imports, which subtracts from what was inappropriately added by other GDP components….the Advance Estimate of 3rd Quarter GDP from the Bureau of Economic Analysis estimated that the real output of goods and services produced in the US grew at a 3.4% annual rate over the output of the 2nd quarter, when our real output grew at a 2.2% rate….in current dollars, our third quarter GDP grew at a 5.605% annual rate, increasing from what would work out to be a $32,563.0 billion a year output rate in the 2nd quarter to a $33,010.0 billion annual rate in the 3rd quarter, with the headline 3.4% annualized rate of increase in real output arrived at after annualized GDP inflation adjustments averaging 2.3% were computed from the price changes of the GDP components and applied to their current dollar change….

As is usual with an advance estimate, the BEA cautions that the source data is incomplete and also subject to revisions, which have averaged +/-0.6% in either direction before the third estimate for the quarter is released, which will be roughly two months from now…also note that September’s construction, September’s trade in services, and non-durables factory inventory data had not yet been reported or formally estimated at the time of the reort, and that the BEA assumed an $11.5 billion annualized increase in exports of services, a $5.3 billion annualized increase in imports of services, an $0.6 billion monthly increase in residential construction, a $7.8 billion monthly increase in non-residential construction, a $3.7 billion decrease in public construction, and a $1.5 billion increase in nondurable manufacturing inventories for September before they estimated the 3rd quarter’s output (see Key source data and assumptions (xls) for more details)

While we review the details for the 3rd quarter below, remember that the news release for GDP reports all quarter over quarter percentage changes at an annual rate, which means that they’re expressed as a change that’s a bit more than 4 times of that what actually occurred over the 3 month period, and that the prefix “real” is used to indicate that each change has been adjusted for inflation using price indexes chained from 2017 prices, and then that all percentage changes in this report are calculated from those ‘2017 dollar’ figures, which would be better thought of as a quantity indexes than as any reality based dollar amounts….for our purposes, all the data that we’ll use in reporting the changes here comes directly from here comes directly from National Income and Product Accounts Data Tables.…specifically, we’ll be referencing Table 1.1.1. Percent Change From Preceding Period in Real Gross Domestic Product, which shows the real (ie, inflation adjusted) annualized change in each of the major GDP components by quarter since the first quarter of 2024, Table 1.1.5. Gross Domestic Product, which shows the quarterly current dollar values for each of the major GDP components since the first quarter of 2024, Table 1.1.7. Percent Change From Preceding Period in Prices for Gross Domestic Product, which shows the change in the price indexes for each of the major GDP components over the same period;  Table 1.4.1. Percent Change From Preceding Period in Real Gross Domestic Product, Real Gross Domestic Purchases, and Real Final Sales to Domestic Purchasers, which shows the change in the named and related metrics over the same quarters, Table 1.5.2. Contributions to Percent Change in Real Gross Domestic Product, Expanded Detail, which shows the contribution of each of the components to the GDP change for those quarters; and Table 1.5.6. Real Gross Domestic Product, Expanded Detail, Chained Dollars, which shows the inflation adjusted value of each of the GDP components……

Personal consumption expenditures (PCE), which are used to compute the goods and services produced for consumers and which accounts for almost 70% of GDP, grew at a 5.94% rate in current dollars in the 3rd quarter, which worked out to a rounded 3.8% real growth rate of consumed goods and services after the 3rd quarter’s annualized 2.1% PCE price index increase was computed from price changes of the PCE components and used to adjust that nominal personal spending for inflation….consumer outlays for durable goods grew at a 4.49% rate, while average prices of those durable goods rose at a 2.1% rate, and from those figures, the BEA figured that the real growth of the output of consumer durables grew at a 2.3% rate, as increases in real consumption of motor vehicles and parts, furnishings and durable household equipment and other durables offset a decrease in consumption of recreational goods and vehicles at a 5.8% rate…at the same time, consumer spending for non-durable goods grew at a 3.05% rate, which was adjusted for prices that fell at an average 0.4% rate, and hence the real output of consumer non-durable goods increased at a 3.4% rate, as greater real consumption of nondurable goods other than groceries, apparel, and gasoline accounted for nearly two-thirds of the growth in nondurable goods output…. meanwhile, the third quarter’s 7.04% nominal growth rate in consumer outlays for services was deflated by a 2.8% increase in prices for personal services to show that the real output of consumer services grew at a rounded 4.1% annual rate, as the food services and accommodations component grew at a 8.9% rate and accounted for more than a quarter of the quarter’s broad based growth in services.…as a result of those changes in growth from the 2nd to the 3rd quarter, the increase in real consumption of durable goods added 0.17 percentage points to the GDP growth rate, the real increase in non-durable goods produced for consumers added 0.47 percentage points, and increased consumption of personal services added 1.76 percentage points to the growth rate of GDP in the 3rd quarter…

The change in other components of the change in GDP are computed by the BEA in the same manner as we have just illustrated for computing the PCE components; ie, in each case, the annualized percentage increase in current dollar spending for the quarter is adjusted with the annualized inflation factor for that component, yielding the percentage change in real units of goods or services produced during the quarter, at an annual rate…..thus, after inflation adjustments, real gross private domestic investment, which had grown at a 4.6% annual rate in the 2nd quarter, grew at a 19.4% annual rate from those levels in the 3rd quarter, as real growth in fixed investments grew at a 9.4% annual rate in the 3rd quarter, after growing at a 7.7% rate in the 2nd quarter, while the change in growth of private inventories was positive in the 3rd quarter in contrast to the 2nd quarter decrease, and hence increased GDP….among the fixed investment categories, real nonresidential fixed investment grew at a 12.7% rate, as real investment in non-residential structures grew at 5.4% rate and added 0.15 percentage points to 3rd quarter GDP, real investment in equipment grew at 20.9% rate and added 1.16 percentage points to GDP, and real investment in intellectual property grew at a 8.4% rate and added 0.47 percentage points to GDP…however, real residential investment shrunk at a 3.3% rate in the 3rd quarter, after growing at a 2.8% rate in the 2nd quarter, and subtracted 0.12 percentage points from 3rd quarter GDP, and thus lowered the overall fixed investment component growth rate to 9.4%….for an easy to read table as to what’s included in each of those GDP investment categories, see the NIPA Handbook, Chapter 6, page 3.

Meanwhile, real private inventories grew at an inflation adjusted $20.3 billion rate over the 3rd quarter, after shrinking at an inflation adjusted $63.4 billion rate in the 2nd quarter, and as a result the $83.7 billion positive change in real inventory growth added 1.61 percentage points to the 3rd quarter’s growth rate, after a $32.7 billion negative change in real inventory growth in the 2nd quarter had subtracted 0.53 percentage points from that quarter’s GDP.   However, since greater growth of inventories indicates that more of the goods produced during the quarter were left in storage or sitting on a shelf, the $83.7 billion increase in their growth in turn means real final sales of GDP were smaller by that amount, and hence real final sales of GDP only grew at a 1.7% rate in the 3rd quarter, down from the real final sales growth rate of 2.8% in the 2nd quarter, when negative inventory growth meant that some of what was sold during the quarter hadn’t been produced during that period…

Our real exports decreased during the third quarter, while our real imports increased, and hence both components of our international trade were subtractions from GDP….Our real exports of goods and services shrunk at a 5.7% rate in the third quarter, after growing at a 5.0% rate in the 2nd quarter, while our real imports grew at a 19.7% rate in the third quarter, after growing at a 12.6% rate in the 2nd quarter.  Increases in exports are added to GDP because they represent a part of our production that was not consumed or added to investment in our country (& hence not counted in the GDP computation elsewhere), while increases in imports are subtracted from GDP because they represent either consumption or investment that was added to another GDP component that shouldn’t have been, because that portion was not produced here. Thus the 5.7% 3rd quarter decrease in real exports subtracted 0.68 percentage points from 3rd quarter GDP, after the 2nd quarter increase in exports had added 0.56 percentage points to second quarter GDP. On the other hand, since imports are subtracted from GDP, their increase at a 19.7% rate subtracted 2.64 percentage points from 3rd quarter GDP, after the second quarter import increase had subtracted 1.66 percentage points from that quarter’s growth….As a result, our worsening trade balance subtracted a rounded net of 3.32 percentage points from the 3rd quarter’s GDP growth rate, after our second quarter trade imbalance had subtracted 1.10 percentage points from GDP growth in that quarter..

Finally, real consumption and investment by the government sector increased at a 5.3% annual rate in the 3rd quarter, after shrinking at a 0.1% rate in the 2nd quarter, as real federal government consumption and investment grew at a 15.8% rate, while real state and local consumption and investment shrunk at a 0.1% rate. Inflation adjusted federal spending for defense grew at a 11.7% rate, and that added 0.41 percentage points to 3rd quarter GDP growth, while real non-defense federal consumption and investment grew at a 22.2% rate and added 0.49 more percentage points to GDP.  Note that federal government outlays for social insurance are not included in this GDP component; rather, they are included within personal consumption expenditures only when such funds are spent on goods or services, indicating an increase in the output of those goods or services. Meanwhile, real state and local government investment and consumption expenditures, which shrunk at a 0.1% annual rate, subtracted 0.01 percentage point from the quarter’s growth rate, as an decrease in real state and local investment at a 1.7% rate offset the similar increase in state and local consumption expenditures…

September Personal Income Rose 0.2%, Spending Rose 0.5%, PCE Price Index Rose 0.5%; Savings Rate Fell to 3.8%, a 4 Year Low

The PCE data in the 3rd quarter GDP report we just reviewed originated in the concurrent release of the September Income and Outlays report, and like the GDP report, all the dollar values reported here are seasonally adjusted and at an annual rate, ie, they tell us what our national personal income, spending and saving would be for a year if September’s adjusted income and spending were extrapolated over an entire year…however, the percentage changes are computed monthly, from one annualized figure to the next, and in this case of this month’s report they give us the percentage change in each annualized metric from August to September….

Thus, as they now partly explain in the opening line of the news release for this report “Personal income increased $54.5 billion (0.2 percent at a monthly rate) in September…“, which means that the annualized figure for all types of personal income in September, $27,707.8 billion, was $54.5 billion, or almost 0.2% more than the annualized personal income figure of $27,653.4 billion for August; the actual increase in personal income from August to September, which is about one-twelfth that amount, is not given….similarly, disposable personal income, which is income after taxes, rose by more than 0.2%, from an annual rate of $24,236.3 billion in August to an annual rate of $24,289.0 billion in September…the monthly contributors to the change in personal income, which can be seen in NIPA Table 2.6., are thus also annualized…in September, the main contributors to the $54.5 billion annual rate of increase in personal income were a annualized $30.7 billion increase in wages and salaries, an annualized $14.1 billion increase in government social benefits to persons, and an $11.4 billion annualized increase in supplements to wages and salaries, such as employer contributions to pension funds, while dividend income saw a $14.3 billion annualized decrease…

Meanwhile, seasonally adjusted personal consumption expenditures (PCE) for September, which were included in the change in real PCE in the 3rd quarter GDP report, rose at a $113.1 billion annual rate to a $22,452.8 billion pace of consumer spending annually, more than 0.5% above that of August, after August‘s PCE was revised up from the previously reported annual rate of $22,308.5 billion to $22,339.7 billion….the current dollar increase in September personal spending included a $78.1 billion annualized increase to an annualized $15,474.1 billion in spending for services, and a $35.1 billion increase to $6,978.7 billion in annualized spending for goods….total personal outlays, which includes interest payments and personal transfer payments in addition to PCE, rose by an annualized $113.0 billion to $23,377.9 billion in September, which left personal savings, which is disposable personal income less total outlays, at a $911.1 billion annual rate in September, down from the revised $971.4 billion in annualized personal savings in August…as a result, the personal saving rate, which is personal savings as a percentage of disposable personal income, fell to 3.8% in September, down from 4.0% in August, and the lowest personal savings rate since October 2022…

While our personal consumption expenditures accounted for 68.9% of our third quarter GDP, before they could be used in that measurement of the change in our national output, they first needed to be adjusted for inflation, to give us the real change in consumption, and hence the real change in the goods and services that were produced for that consumption…..the BEA makes that adjustment with the price index for personal consumption expenditures, also included in this report, which is a chained price index based on 2017 prices = 100….from NIPA Table 2.3.4., we find that the PCE price index rose from 131.006 in August to 131.685 in September, giving us a month over month PCE inflation rate of +0.518297%, which the BEA reports as a 0.5% increase….also updated with this report, NIPA Table 2.8.11. gives us a year over year PCE price index increase of 2.5%, and a core price increase, excluding food and energy, of 2.8% for the past year, both still above the Fed’s 2% inflation target….applying the September inflation adjustment to the change in September PCE shows that real PCE was down 0.01196%, which BEA reports as unchanged in their summary table…note that when those PCE price indexes are applied to a given month’s annualized current dollar PCE, it yields that month’s annualized real PCE in chained 2017 dollars, which aren’t really dollar amounts at all, but merely the means that the BEA uses to compare one month’s or one quarter’s real goods and services produced to another….those monthly figures are shown in NIPA Table 2.8.6., and are ultimately used to compute the contribution of real personal consumption of goods and services to GDP…

September Durable Goods: New Orders Rose 1.8%, Shipments Rose 0.9%, Inventories Rose 0.3%

The Advance Report on Durable Goods Manufacturers’ Shipments, Inventories and Orders for September (pdf) from the Census Bureau reported that the value of the widely watched new orders for manufactured durable goods rose by $6.3 billion or 1.8 percent to $345.4 billion in September, the sixth increase in seven months, after August’s new orders were revised from the $338.6 billion reported last month to $339.1 billion, now a 0.1% increase from July’s orders, rather than the statistically insignificant decrease that was previously reported …year to date new orders are now running 8.0% above those of 2025, up from the 7.7% year to date increase we saw in this report last month…

The volatile monthly change in new orders for transportation equipment led the September new orders increase, as the value of new transportation equipment orders rose $5.2 billion or 4.6 percent to $119.8 billion, on a 28.4% increase to $25,337 million in the value of new orders for civilian aircraft….excluding orders for transportation equipment, other new orders rose 0.5%, and excluding the 1.8% decrease in new orders for defense equipment, new orders increased 2.2%…meanwhile, new orders for nondefense capital goods less aircraft, a proxy for equipment investment intentions, rose $406 million or 0.5% to $88,039 million, after rising by a revised 1.6% in August…

The seasonally adjusted value of September shipments of durable goods, which were included as inputs into various components of 3rd quarter GDP after adjusting for changes in prices, rose for the ninth time in ten months, increasing by $3.0 billion or 0.9 percent to $336.8 billion, after the value of August shipments was revised from from $333.8 billion to $333.7 billion, still down 0.2% from July…an increase in the value of shipments of transportation equipment led the September increase, as they rose $1.6 billion or 1.4 percent to $111.1 billion, on a 3.4% increase in the value of shipments of civilian aircraft and a 4.4% increase in the value of shipments of defense aircraft, while the value of shipments excluding those of transportation equipment rose 0.7% to $225,670 million….at the same time, shipments of nondefense capital goods less aircraft were up 1.2% at $86,052 million, after rising 0.6% in August…

Meanwhile, the value of seasonally adjusted inventories of durable goods, also a major GDP contributor, rose for the twelfth consecutive month, increasing by $1.9 billion or 0.3 percent to $610.0 billion, after the value of August inventories was revised from $608.1 billion to $608.2 billion, still a 0.5% increase from July…an increase in the value of inventories of transportation equipment led the September inventory increase, rising $0.6 billion or 0.3 percent to $193.2 billion, on a 0.6% increase in the value of inventories of civilian aircraft, while the value of inventories of other than transportation equipment was 0.3% higher at $416,850 million…

Finally, unfilled orders for manufactured durable goods, which are probably a better measure of industry conditions than the widely watched but volatile new orders, rose in September for the twenty-sixth time in twenty-seven months, increasing $13.6 billion or 0.8 percent to $1,623.6 billion, after August’s unfilled orders were revised from $1,609.4 billion to $1,610.1 billion, which was still a 0.6% increase from July….an increase of $8.7 billion or 0.9 percent to $1,019.0 billion in unfilled orders for transportation equipment was responsible for nearly two-thirds of the increase, while unfilled orders excluding transportation equipment orders rose by $4,848 million or by 0.8% to $604,637 million at the same time….compared to a year earlier, the unfilled order book for durable goods is now 9.0% above the level of last September, as unfilled orders for transportation equipment are 9.6% above their year ago level, largely due to a 10.4% increase in the backlog of orders for civilian aircraft…

New Home Sales Little Changed on Modestly Higher Prices

The Census report on New Residential Sales for September (pdf) estimated that new single family homes were selling at a seasonally adjusted pace of 767,000 annually, which was 0.6 percent (±13.8 percent)* below the revised annual pace of 680,000 that new single family homes were selling at in August, and 5.3 percent (±12.5 percent)* below the estimated annual rate that new homes were selling at in September of last year….the asterisks indicate that based on their small sampling, Census could not be certain whether September new home sales rose or fell from those of August, or even from the home sales of a year ago, with the figures in parenthesis representing the 90% confidence range for reported data in this report, which has the largest margin of error and is subject to the largest revisions of any census construction series….hence, the estimates provided in these initial new home sales reports are not very reliable and often see significant revisions…with this report; sales of new single family homes in August were revised from the annual rate of 684,000 reported last month to a 680,000 a year rate, and home sales in July, initially reported at an annual rate of 678,000 and revised to a 643,000 a year rate last month, were revised to a 647,000 annual rate with this report, while June’s annualized home sale rate, initially reported at an annual rate of 628,000 and revised from a revised 678,000 rate to a 672,000 a year rate with the August report, were revised to a 680,000 a year rate with this release…

The annual rates of sales reported here are seasonally adjusted after extrapolation from the estimates of canvassing Census field reps, which indicated that approximately 56,000 new single family homes sold in September, down from the estimated 57,000 new homes that sold in August, but up from the estimated 53,000 that sold in July….the raw figures from Census field agents further estimated that the median sales price of new houses sold in September was at $400,400, up from the median sale price of $385,400 in August, but down from the median sales price of $416,800 in September a year ago, while the average September new home sales price was at $472,800, up from the $470,800 average sales price in August, but down from the average sales price of $506,800 in September a year ago….a seasonally adjusted estimate of 476,000 new single family houses remained for sale at the end of September, which represents a 8.4 month supply of homes at the September sales rate, down from the revised 8.5 months supply of new homes now indicated for August, but up from the 8.2 months of new home supply on the market in September a year ago…

(the above is the synopsis that accompanied my regular Sunday morning news links emailing, which in turn was mostly selected from my weekly blog post on the global glass onion…if you’d be interested in receiving my weekly emailing of selected links, most of which are chosen from the aforementioned GGO posts, contact me…)

oil price at a 6 month high; US oil supplies at 43 year low; oil and petroleum products supplies at a 23 year low

US oil price at a new 6 month high; natural gas price hit a six month low, record oil production from US wells; Strategic Petroleum Reserve the lowest since October 15, 1982; total of all US oil supplies, including commercial, is the lowest since October 7th, 1983; total US stocks of crude oil and petroleum products at the lowest level since May 9th, 2003

US oil prices finished higher for a fourth consecutive week and for a fourth consecutive month after Houthi missiles struck the Saudi’s main export hub and a couple of their largest refineries, while at least a couple oil tankers exploded and caught fire while trying to transverse the Strait of Hormuz on Friday…after rising 4.3% to a six month high of $103.27 a barrel last week on continued attacks on Saudi Arabian infrastructure and on Persian Gulf shipping, the contract price for the benchmark US light sweet crude for December delivery fell more than 2% in early Asian trading Monday, as hopes for easing hostilities between the United States and Iran eased market concerns, and were still down more than 1% in early trading in New York, as Saudi, Pakistani and Turkish officials prepared to meet in Tehran for talks aimed at preventing a further escalation of tensions in the Middle East, and settled $1.51 lower at $101.76 a barrel as the market weighed the hopes of easing hostilities between the U.S. and Iran against the continuing Houthi attacks on Saudi Arabia….oil prices again traded lower on Tuesday morning in Asia following reports of renewed diplomatic efforts to ease tensions in West Asia, but turned higher as markets opened in London as escalating Houthi strikes on Saudi energy infrastructure offset ongoing diplomatic efforts to ease the U.S.–Israeli conflict with Iran, then steadied in early trading in New York as traders weighed renewed diplomacy hopes against supply risks posed by the latest wave of Houthi attacks on Saudi Arabia, before again turning lower to settle down $1.86 at $99.90 per barrel on the news that Iranian Security Council Chief Mohsen Rezaei met with Supreme Leader Ayatollah Mojtaba Khamenei following talks with representatives from Saudi Arabia, Turkey, and Pakistan….crude oil prices rose during Asian trading on Wednesday amid renewed concerns over oil supplies from the Middle East after Yemen’s Houthi rebels launched a missile attack on Saudi Arabia’s Ras Tanura refinery, one of the country’s largest oil-processing facilities, and were up nearly $2 in early trading in New York following the latest Houthi strike on the Saudi Arabia’s main export hub, further threatening to tighten a supply-starved global fuels market, then rallied to a high of $103.55 in afternoon trading after the EIA’s weekly petroleum status report showed a larger than expected 1.9 million barrel draw from US crude oil stocks, and settled $2.88 higher at $102.78 a barrel following the larger-than-expected decline in US commercial crude inventories and escalating fighting in the Middle East, where Houthi rebels attacked Yemen’s capital Aden, suspending airport operations…oil prices fell on global markets Thursday after the Wall Street Journal reported that US Vice President JD Vance had contacted Mohsen Rezaei, head of Iran’s Security Council, to restart peace talks, and were still down about 1% in early trading in New York as traders assessed the latest diplomatic push for a temporary peace deal between the U.S. and Iran. while the first tranche of oil and diesel from European emergency reserves was set to be released over the following days, and settled 78 cents lower at $102.00 a barrel, as prospects of renewed peace negotiations eased fears of supply disruptions stemming from escalating tensions in the Middle East…oil prices jumped more than 1% during Asian trading Friday after an oil tanker in the Strait of Hormuz had been attacked using explosive devices planted by a small boat, and were on track for sharp monthly gains after a series of new maritime security incidents in the Strait of Hormuz heightened concerns about Middle East energy supplies, then continued rising in early US trading as traders weighed the growing likelihood of a reescalation in the U.S.-Iran war following next week’s U.S. elections, and settled $2.12 higher at a six month high of $104.12 a barrel as traders braced for a potential escalation in the Iran war after the US midterm elections, as the attack on a tanker in the Strait of Hormuz highlighted the supply risks…oil prices thus finished 0.8% higher for the week and up 13.9% for the month from the final $90.42 quote at the end of September, largely on repeated attacks on Saudi energy infrastructure and tanker traffic around the Strait of Hormuz….

meanwhile, natural gas prices finished higher for the first time in three weeks, but that was only due to the switch to quoting the higher priced December contract, which itself fell in price over the week, largely on El Nino forecasts for a warmer than normal winter…after falling 15.3% to $2.640 per mmBTU last week on forecasts for mild weather to persist well into November across most of the US, and on massive short selling because of those forecasts, the price of the benchmark natural gas contract for November delivery opened 10.9 cents lower on Monday, as forecasts for heating demand remained subdued, but trended higher throughout the session before settling 3.8 cents lower at $2.602 per mmBTU, as forecasts shifted significantly warmer over the weekend, reinforcing traders’ expectations that a Super El Niño weather pattern would produce very mild weather this winter, reducing demand for gas when it is typically ​the highest….the November contract started 4.7 cents higher on Tuesday, as LNG demand held strong for the bulls but benign weather supported the bears, and settled 9.5 cents higher at $2.697 per mmBTU, as modestly cooler weather model revisions and a rebound in LNG feedgas demand offered support and prompted short covering ahead of the November contract’s expiration…that contract opened 8.3 cents higher on its last day of trading Wednesday, as whispers of cooler temperature arriving in long-range forecasts helped to rally buyers, and went off the board 12.0 cents higher at $2.817 per mmBTU, as improving longer-range weather signals and speculation about a possible polar vortex disruption encouraged buyers, despite persistent bearish fundamentals, while the more actively traded natural gas contract for December delivery settled 2.8 cents higher at $3.032 per mmBTU…with markets now citing the price of the benchmark natural gas contract for December delivery, that contract opened 8.5 cents lower on Thursday, which some analysts attributed to profit-taking, and then tumbled to an intraday low of $2.897 after a bearish natural gas storage report hit the wire, before settling 8.0 cents lower at $2.952 per mmBTU after a larger-than-expected storage injection broke a 10-week streak of below-average inventory builds…natural gas prices continued slumping in early trading Friday, as benign fall temperatures and a bearish storage print loomed large over the market, then limped into midday as traders sized up a bearish storage result and expectations for another, as weather waned and production climbed, and settled down 5.4 cents at $2.898 per mmBTU as the prospect of additional supply returning before meaningful winter heating demand would arrive kept the market on the defensive….natural gas prices thus appeared to have finished the week 9.8% higher, but that was due to switching from the oversold November contract to the higher priced December contract midweek…that December contract itself, which finished the prior week priced at $3.050 per mmBTU, actually finished 5.0% lower…

The EIA’s natural gas storage report for the week ending October 23rd indicated that the amount of working natural gas held in underground storage rose by 80 billion cubic feet to 3,724 billion cubic feet by the end of the week, which left our natural gas supplies 147 billion cubic feet, or 3.8% below the 3,871 billion cubic feet of gas that were in storage on October 23rd of last year, but 38 billion cubic feet, or 1.0% above the five-year average of 3,686 billion cubic feet of natural gas that had typically been in working storage as of the 23rd of October over the most recent five years….the 80 billion cubic foot injection into natural gas storage for the cited week was more than the 70 billion cubic foot injection into storage that the market had been expecting ahead of the report, and it was also more than the 75 billion cubic foot of gas that were injected into natural gas storage during the corresponding week of 2025, and also a bit more than the average 77 billion cubic foot injection into natural gas storage that had been typical in mid to late October over the past five years…

The Latest US Oil Supply and Disposition Data from the EIA

US oil data from the US Energy Information Administration for the week ending October 23rd showed that despite an increase in our oil imports and a jump in production from US wells, we again had to pull oil from our stored crude supplies for the twenty-fourth time in twenty-seven weeks, and for the 46th time in seventy-four weeks, largely due to jump in our oil exports that offset the supply increases…. Our imports of crude oil rose by an average of 616,000 barrels per day to average 6,374,000 barrels per day, after falling by an average of 291,000 barrels per day during the prior week, while our exports of crude oil rose by an average of 1,412,000 barrels per day to average 4,854,000 barrels per day, which, when used to offset our imports, meant that the net of our trade of oil worked out to an import average of 1,520,000 barrels of oil per day during the week ending October 23rd, an average of 837,000 fewer barrels per day than the net of our imports minus our exports during the prior week… At the same time, transfers to our oil supplies from Alaskan gas liquids, from natural gasoline, from condensate, and from unfinished oils were 3,000 barrels per day higher than the prior week at 540,000 barrels per day, while during the same week, production of crude from US wells was 723,000 barrels per day higher at a record high of 13,992,000 barrels per day.  Hence, our daily supply of oil from the net of our international trade in oil, from transfers, and from domestic well production appears to have averaged a total of 16,052,000 barrels per day during the October 23rd reporting week…

Meanwhile, US oil refineries reported they were processing an average of 16,526,000 barrels of crude per day during the week ending October 23rd, an average of 123,000 fewer barrels per day than the amount of oil that our refineries reported they were processing during the prior week, while over the same period, the EIA’s surveys indicated that an average net of  285,000 barrels of oil per day were being pulled out of the supplies of oil stored in the US… So, based on that reported & estimated data, the crude oil figures provided by the EIA appear to indicate that our total working supply of oil from storage, from net imports, from transfers, and from oilfield production during the week ending October 23rd averaged 189,000 fewer barrels per day than what our oil refineries reported they used during the week.  To account for the difference between the apparent supply of oil and the apparent disposition of it, the EIA just plugged a rounded [ +189 ,000 ] barrel per day figure onto line 16 of the weekly U.S. Petroleum Balance Sheet, in order to make the reported data for the supply of oil and for the consumption of it balance out, a fudge factor that they label in their footnotes as “unaccounted for crude oil”, thus indicating there must have been a error or omission of that amount in the week’s oil supply & demand figures that we have just transcribed….However, since most oil traders react to the figures in these weekly EIA reports as if they were gospel, and since these weekly figures therefore often drive oil pricing and hence decisions to drill or complete oil wells, we’ll continue to report this data just as it’s published, and just as it’s watched & believed to be reasonably reliable by most everyone in the industry…(for more on how this weekly oil data is gathered, and the possible reasons for that “unaccounted for” oil supply, see this EIA explainer….also see this March 2023 twitter thread from an EIA administrator addressing these ongoing weekly errors, and what they had once hoped to do about it).

This week’s rounded 285,000 barrel per day average decrease in our overall crude oil inventories came as an average of 270,000 barrels per day were being pulled out of our commercial stocks of crude oil, while 14,000 barrels per day were being pulled out of our Strategic Petroleum Reserve, the thirtieth Iran war related withdrawal from the SPR in the past 31 weeks, which left the SPR level at 282,583,000 barrels, the lowest since October 15, 1982, which was during its initial fill-up……with both commercial oil and the SPR inventories down this week, that left the Total of all US Oil Supplies at 693,208,000 barrels, down 20.4% from 870,774,000 barrels on April 17th, and the lowest since October 7th, 1983….

Further details from the weekly Petroleum Data Overview (pdf) indicated that the 4 week average of our oil imports rose to 6,255,000 barrels per day last week, which was 9.3% more than the 5,724,000 barrel per day average that we were importing over the same four-week period last year, while the four week average of our exports rose to 4,408,000 barrels per day last week, which was 6.1% more than the 4,155,000 barrel per day average that we were exporting last year year at this time… The week’s crude oil production was reported to be 723,000 barrels per day higher at a record 13,992,000 barrels per day as the EIA’s estimate of the output from wells in the lower 48 states was 753,000 barrels per day higher per day higher at 13,510,000 barrels per day, while Alaska’s oil production was 30,000 barrels per day lower at 582,000 barrels per day… US crude oil production had reached a pre-pandemic high of 13,100,000 barrels per day during the week ending March 13th 2020, so this week’s reported oil production figure was 6.8% higher than that of our pre-pandemic production peak, and was also 44.2% above the pandemic low of 9,700,000 barrels per day that US oil production had fallen to during the third week of February of 2021.

US oil refineries were operating at 92.8% of their capacity while processing those 16.526,000 barrels of crude per day during the week ending October 23rd, down from 93.4% the prior week, but still well above normal utilization for Autumn, when refineries are typically taken down for annual maintenance….however, the 16,526,000 barrels of oil per day that were refined that week were still 8.6% more than the 15,219,000 barrels of crude that were being processed daily during the week ending October 24th of 2025, and 3.3% more than the 15,998,000 barrels that were being refined during the pre-pandemic week ending October 25th, 2019, when our refinery utilization rate was at 87.7%, which was below the pre-pandemic normal utilization rate for this time of year, probably due to the the lingering impact of historic flooding across southeast Texas in the wake of Tropical Storm Imelda of that year…

With the decrease in the amount of oil that was being refined this week, gasoline output from our refineries also lower, decreasing by 509,000 barrels per day to 9,241,000 barrels per day during the week ending October 23rd, after our refineries’ gasoline output had increased by 518,000 barrels per day during the prior week… This week’s gasoline production was 3.6% less than the 9,590,000 barrels of gasoline that were being produced daily over the week ending October 24th of last year, and 9.3% less than the gasoline production of 10,184,000 barrels per day seen during the prepandemic week ending October 25th, 2019….at the same time, our refineries’ production of distillate fuels (diesel fuel and heat oil) decreased by 71,000 barrels per day to 5,161,000 barrels per day, after our distillates output had increased by 43,000 barrels per day during the prior week.  Even after that production decrease, our distillates output was 14.7% more than the 4,498,000 barrels of distillates that were being produced daily during the week ending October 24th of 2025, and 3.8% more than the 4,970,000 barrels of distillates that were being produced daily during the pre-pandemic week ending October 25th, 2019….

Even with this week’s decrease in our gasoline production, our supplies of gasoline in storage at the end of the week rose for the tenth time in thirty-seven weeks, increasing by 3,870,000 barrels to 209,180,000 barrels during the week ending October 23rd, after our gasoline inventories had ​decreased by 3,518,000 barrels during the prior week.  Our gasoline supplies rose this week because the amount of gasoline supplied to US users fell by 624,000 barrels per day to 8,358,000 barrels per day, and because our exports of gasoline fell by 81,000 barrels per day to 845,000 barrels per day, and because our imports of gasoline rose by 117,000 barrels per day to 399,000 barrels per day… After fifty-seven gasoline inventory withdrawals over the past eighty-eight weeks, our gasoline supplies were 0.7% lower than last October 24th’s gasoline inventories of 210,738,000 barrels, and were about 2% below the five year average of our gasoline supplies for this time of year…

After this week’s decrease in distillates production, our supplies of distillates fell for the eighteenth time in thirty-seven weeks, decreasing by 1,462,000 barrels to 102,824,000 barrels during the week ending October 23rd, after our distillates supplies had increased by 1,675,000 barrels during the prior week… Our distillates supplies fell this week because the amount of distillates supplied to US markets, an indicator of domestic demand, rose by 475,000 barrels per day to 4,207,000 barrels per day, and even as our exports of distillates fell by 59,000 barrels per day to 1,320,000 barrels per day, while our imports of distillates rose by 40,000 barrels per day to 157,000 barrels per day… After 34 withdrawals from distillates inventories over the past 67 weeks, our distillates supplies at the end of the week were 8.3% below the 112,189,000 barrels of distillates that we had in storage on October 24th of 2025, and were about 10% below the five year average of our distillates inventories for this time of the year…

Finally, even with record production from US wells, the big jump in exports meant our commercial supplies of crude oil in storage fell for the 18th time in twenty-six weeks, for the 28th time over the past year, decreasing by 1,892,000 barrels over the week, from 412,517,000 barrels on October 16th to 410,625,000 barrels on October 23rd, after our commercial crude supplies had decreased by 3,060,000 barrels over the prior week….After this week’s decrease, our commercial crude oil inventories were about % below recent five-year average of commercial oil supplies for this time of year, while they were 19.9% above the average of our available crude oil stocks as of the fourth weekend of October over the 5 years at the beginning of the past decade, with the difference between those comparisons arising because it wasn’t until early 2015 that our oil inventories had first topped 400 million barrels. After our commercial crude oil inventories had jumped to record highs during the Covid lockdowns in the Spring of 2020, then jumped again after February 2021’s winter storm Uri froze off US Gulf Coast refining, but then fell sharply due to increased exports to Europe following the onset of the Ukraine war, only to jump again following the Christmas 2022 refinery freeze-offs, changes in our commercial crude inventories had been less extreme up until the onset of the Iran war, when they were initially built up to a three year high by mid-April, before falling to the lowest in nearly eight years by late July…This week’s decrease was preceded by three larger draws, so as of October 23rd our commercial crude inventories were 1.3% below the 415,966,000 barrels of oil we had in commercial storage on October 24th of 2025, and 3.5% less than the 425,509,000 barrels of oil that we had in storage on October 25th of 2024, and 2.7% less than the 421,893,000 barrels of oil we had left in commercial storage on October 27th of 2023…

With this week’s drop in commercial crude SPR oil inventories, and distillates, that also meant that the week ended with the total US stocks of crude oil and petroleum products down by 3,106,000 barrels to 1,495,139,000 barrels, the lowest for that total liquids supply figure since May 9th, 2003…

This Week’s Rig Count

The US rig count was unchanged for a third consecutive week over the week ending October 30th, as the number of rigs targeting oil was up by two, the count of rigs targeting natural gas was down by two, and miscellaneous rigs were unchanged…for a quick snapshot of this week’s rig count, we are again including below a screenshot of the rig count summary table from Baker Hughes…in the table below, the first column shows the active rig count as of October 30th, the second column shows the change in the number of working rigs between last week’s count (October 23rd) and this week’s (October 30th) count, the third column shows last week’s October 23rd active rig count, the 4th column shows the change between the number of rigs running on Friday and the number running on the Friday of the same week of a year ago, and the 5th column shows the number of rigs that were drilling at the end of that reporting period a year ago, which in this week’s case was Friday, the 31st of October, 2025…

++

September’s housing starts and building permits

It appears that the only widely watched report that was released last week was the September report on New Residential Construction from the Census Bureau….the week also saw the release of the Regional and State Employment and Unemployment Report for September from the Bureau of Labor Statistics, a report which breaks down the two employment surveys from the monthly national jobs report by state and region …while the text of that report provides a useful summary of the state and regional data, the serious statistical aggregation can be found in the tables linked at the end of the report, where one can find the civilian labor force data and the change in payrolls by industry for each of the 50 states, the District of Columbia, Puerto Rico, and the Virgin Islands..

Housing Starts Reportedly Lower in September, Building Permits Little Changed

The September report on New Residential Construction (pdf) from the Census Bureau reported that their widely watched estimate of new housing units that were started during the month was at a seasonally adjusted annual rate of 1,221,000, which was 5.2 percent (±11.8 percent)* below the revised August estimated annual rate of 1,288,000 housing unit starts, and was 7.4 percent (±11.5 percent)* below last September’s pace of 1,319,000 housing starts a year…the asterisks indicate that the Census Bureau does not have sufficient data to determine whether housing starts actually rose or fell over the past month, or even over the past year, with the figure in parenthesis the most likely range of the change indicated; in other words, September’s housing starts could have been up by 6.6%, or down by as much as 17.0% from those of August, with a 10% chance that the actual change could have even been outside of that wide range….in this report, the annual rate for August housing starts was revised from the 1,275,000 reported last month to 1,288,000, while July starts, which were first reported at a 1,239,000 annual rate, were revised from last month’s initial revised figure of 1,309,000 annually to a 1,369,000 annual rate with this report….

Those annual rates of housing starts reported here were extrapolated from a survey of a small percentage of US building permit offices visited by canvassing Census field agents, which estimated that 103,800 housing units were started in September, down from the 111,400 units started in August…of those housing units started in September, an estimated 72,600 were single family homes and 30,100 were units in structures with more than 5 units, down from the revised 78,900 single family starts in August, and down from the 31,500 units started in structures with more than 5 units in August…

The monthly data on new building permits, with a smaller margin of error, are probably a better monthly indicator of new housing construction trends than the volatile and often revised housing starts data, which can also be impacted by unusual weather….in September, Census estimated new building permits were being issued for a seasonally adjusted annual rate of 1,400,000 housing units, which was 0.2 percent below the revised August rate of 1,403,000 permits, and was 3.0 percent below the 1,444,000 rate of building permit issuance now reported for September a year earlier…the annual rate for housing permits issued in August was revised from an annual rate of 1,394,000 to 1,403,000 annually….

Again, these annualized estimates for new permits reported here were extrapolated from the unadjusted estimates collected monthly by canvassing census agents, which showed permits for 115,100 housing units were issued in September, down from the revised estimate of 118,300 new permits issued in August…the September permits included 69,800 permits for single family homes, down from 74,200 single family permits in August, and 40,700 permits for housing units in apartment buildings with 5 or more units, up from 40,100 such multifamily permits a month earlier…

(the above is the synopsis of last week’s economic reports that accompanied my regular Sunday morning news links emailing, which in turn was mostly selected from my weekly blog post on the global glass onion…if you’d be interested in receiving my weekly emailing of selected links, most of which are chosen from the aforementioned GGO posts, contact me…)

oil price at six month high; natural gas shorts 139% of physical supply; US oil supplies at 43 year low; record refinery thruput

US oil price at ​a six month high; natural gas short sales now exceed national physical natural gas inventories by 39%; US Strategic Petroleum Reserve is at its lowest level since October 15 1982; total US oil supplies are the lowest since October 7th, 1983; US stocks of crude oil and petroleum products are the lowest since May 23, 2003; more barrels of oil were refined than in any October week on record, gasoline imports were at at a 23 month low..

US oil prices finished higher for a third straight week on continued attacks on Saudi Arabian infrastructure and ​on Persian Gulf shipping…after rising 10.4% to $101.41 a barrel last week after Houthi missiles struck the Saudi’s International Airport in Riyadh and Saudi Aramco’s headquarters in Dhahran, Iran sunk two cargo ships and struck at least a dozen others in the Strait of Hormuz, and US oil supplies fell by the most since February, the contract price for the benchmark US light sweet crude for November delivery traded lower on global markets early Monday after U.S. President Trump waived sanctions and tariffs on Russia in a move that could pave the way for higher Russian fuel exports, and was down by more than $1 ​most of thhe day as traders booked profits following last week’s ​rise to multi-month highs, but rallied late during the US session to settle $2.25 higher at $103.66 a barrel on the news that Yemen’s Houthis carried out attacks against an Aramco site in Yanbu, the Saudi’s Shaybah oilfield, the King Khalid International Airport in Riyadh, and the Abha International Airport in southwest Saudi Arabia…oil prices edged higher on Asian markets Tuesday after Yemen’s Houthi group claimed attacks on Saudi energy facilities, airports and military targets, while a strike on a military training camp in Yemen that killed at least 58 added to regional security concerns. and remained at a five-month high during trading in Europe as uncertainty over when energy supplies would return to normal amid the war with Iran kept oil inflated, and soared to their highest since May Tuesday morning in New York amid intensifying Iranian attacks on commercial ships in the Strait of Hormuz, and as lingering Houthi threats on Saudi infrastructure supported a higher geopolitical risk premium, but reversed after hitting a six month high and finished $1.87 lower at $101.79 a barrel as traders weighed a meeting between the Iranian president and Pakistan’s army ‌chief, a key US-Iran mediator, against continued Houthi attacks on Saudi infrastructure and reports of vessel attacks in the Gulf as trading of the November oil contract expired, while the contract price for the US benchmark light sweet crude for December delivery settled 72 cents lower at $97.82 a barrel….with markets now citing the price of that December contract, oil gained over $1 in early trading on global markets on Wednesday, as escalating Middle East tensions fueled fears of supply disruptions, while falling crude and product inventories in the United States added support, then jumped by more than $2 in early London trading after Iran said there was little reason to expect diplomatic progress with the US, leaving the Brent benchmark hovering near five-month ‌highs, but were mixed in a choppy morning session in New York amid uncertainty over rumored mediation efforts to end the U.S.-Iran war, and settled 67 cents lower at $97.15 a barrel as the market weighed possible progress towards Russia-Ukraine talks against the little hope of talks between the U.S. and Iran to end the conflict in the Middle East….oil prices rose more than 2% during Asian trading on Thursday after a drone strike on Saudi Aramco’s Shaybah oil field intensified concerns about potential disruptions to energy supplies, then hit their highest levels since May following a report by Iran’s state television that seven oil tankers caught fire and were damaged in the Strait of Hormuz, then jumped further in early US trading after a U.S. State Department order to evacuate diplomats and their families from Saudi Arabia stoked concerns ​t​hat the conflict ​was escalating further, and settled $2.32 higher at $99.47 a barrel, further supported after Saudi Aramco said it told its staff to evacuate its headquarters in Dhahran on the Gulf near Bahrain….oil futures traded higher in Asia on Friday morning amid reports of escalating tensions in West Asia and reports that the US was considering plans to attack Iran after the US midterm elections, and extended their advance Friday morning in New York on growing risks to Middle Eastern oil supply amid the recent escalation in fighting in the region, and settled $3.80 higher at ​a six month high of $103.27 a barrel as Houthi attacks against Saudi Arabia, growing threats to international shipping and an oil spill off the United Arab Emirates increased fears of additional supply disruptions…oil prices thus settled 1.8% higher for the week, while the contract price for the US benchmark light sweet crude for December delivery, which had finished the prior week at $99.02 a barrel, ended the week 4.3% higher…

on the other hand, natural gas prices finished lower for the third time in four weeks on forecasts for mild weather to persist well into November across most of the US, and​ on massive short selling….after falling 3.2% to $3.116 per mmBTU last week on forecasts for mild weather for the near term and also for the coming winter, the price of the benchmark natural gas contract for November delivery opened 2.5 cents higher on Monday, but then trended lower through most of the session, as both the U.S. and European weather models aligned to call for a bearish back end of the month, and settled 5.8 cents lower at $3.058 per mmBTU, despite elevated LNG feedgas demand, as weaker-than-normal heating demand expectations and the prospect of recovering production weighed on nearby contracts, while deferred futures prices showed resilience….natural gas prices started Tuesday 6.3 cents lower, as the latest bearish weather outlook overshadowed healthy LNG export levels, and finished the session 9.5 cents lower at $2.963 per mmBTU amid warmer weather forecasts and expectations that storage injections could continue well into November…natural gas prices opened 11 cents lower on Wednesday, knocked down overnight by bearish revisions to an already unsupportive weather forecast, and finished the session 17.3 cents lower at $2.790 per mmBTU after a steep futures sell-off fueled by forecasts for exceptionally mild weather through early November….natural gas prices were little changed ahead of the storage report early Thursday, then rose to an intraday high of $2.838 at 12:30 PM on the​ report of a historically bullish injection, as traders overlooked current bearish weather forecasts, instead focusing on narrowing storage levels vs. the five-year average, but faded to settle 0.6 cents higher at $2.796 per mmBTU, even as December and the remaining winter contracts declined despite a smaller-than-expected storage injection, with unusually mild weather forecasts continuing to weigh on heating demand expectations…natural gas futures slumped anew early Friday, as further easing in weather demand offset strong LNG volumes and a lean government inventory report, then floundered further at midday as traders gave more weight to weak near-term weather demand than solid LNG activity, and settled 15.6 cents lower at $2.640 per mmBTU as warmer weather forecasts pointed to sluggish heating demand and a potentially growing supply cushion that could keep prices under pressure into winter, and was thus down 15.3% for the week…

The EIA’s natural gas storage report for the week ending October 16th indicated that the amount of working natural gas held in underground storage rose by 77 billion cubic feet to 3,644 billion cubic feet by the end of the week, which left our natural gas supplies 152 billion cubic feet, or 4.0% below the 3,796 billion cubic feet of gas that were in storage on October 16th of last year, but 35 billion cubic feet, or 1.0% above the five-year average of 3,609 billion cubic feet of natural gas that had typically been in working storage as of the 16th of October over the most recent five years….the 77 billion cubic foot injection into natural gas storage for the cited week was close to the 75 billion cubic foot injection into storage that the market had been expecting ahead of the report, but it was less than the 86 billion cubic foot of gas that were injected into natural gas storage during the corresponding week of 2025, and also less than the average 87 billion cubic foot injection into natural gas storage that had been typical in mid October over the past five years…

NB: this week there ​is an article on the massive short sale position in natural gas futures, which is really the underlying reason for the current low prices, mild weather forecasts notwithstanding, so i used Google AI to put it what that means in perspective…in short, Google’s figures show that speculators have sold 39% more natural gas than physically exists in this country…so i’m going to copy that exchange as is, and paste it here, so you can see what it’s about; the rest of the weekly news in the normal format will follow it….​much of this, taken directly as it is from a Google web page, will not format correctly on a blog platform, but the key points should be obvious nonetheless…in the exchange below, my prompts are italicized and underlined,​ as everything else that follows is from Google:

As of October 20, 2026, speculators held 505,747 short contracts in NYMEX Henry Hub natural gas against 264,475 longs.

October 24, 2026

This massive imbalance creates a net short position of 241,272 contracts, marking the most aggressive speculative bet against Henry Hub Natural Gas since February 11, 2020. [1]

The Commodity Futures Trading Commission (CFTC) data released on October 23 outlines an incredibly crowded trade. Wall Street speculators are heavily shorting the market due to mild winter weather forecasts and ample storage levels. [1, 2]

Henry Hub Natural Gas (NGW00)

$3.05

0.66% since Sep 30, 2026

As of Oct 23, 11:58 PM EDT • Disclaimer

The Market Context

• Price Pressure: Natural gas futures experienced a sharp selloff leading up to the report, dropping over 6% in a single session to settle around $3.05/MMBtu as unseasonably warm weather destroyed near-term heating demand. [1, 2]
• The Short-Squeeze Risk: When speculative short interest reaches these extreme historic levels, the market becomes highly vulnerable to a short squeeze. Any sudden shift toward freezing weather or unexpected supply disruptions could force speculators to rapidly buy back their shorts, triggering a violent upward price spike. [1]
• Retail & Equity Impact: This positioning heavily impacts consumer vehicles like the United States Natural Gas Fund (UNG), which slid over 3% to $9.58 following the news. Conversely, some major natural gas equities like EQT managed minor gains as producers look to manage long-term hedging risk. [1]

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Are you monitoring this position to time an entry for a trade, or are you analyzing the broader impact on energy sector equities? Let me know so I can pull specific historical squeeze comparisons or individual stock data.

• Yahoo Finance

  Wall Street Is Betting Big Against Natural Gas as a Mild Winter Looms

  As of October 20, 2026, speculators held 505,747 short contracts in NYMEX Henry Hub natural gas against 264,475 longs. That left a…

• 

  CME Group

  Henry Hub Natural Gas Futures Overview – CME Group

  Henry Hub Natural Gas. Futures and Options. Globex Code. NGX26. Last. 2.626. Change. -0.170 (-6.08%). Volume. 129,202. Watchlists.

   

• 

  Natural Gas Intelligence

  Natural Gas Speculators Add Shorts Ahead of October Shift

  Jodi Shafto on August 25, 2026 at 1:47 p.m. Daily Gas Price Index Natural Gas Prices Natural gas speculators increased their net-s…

•  

Show all

You said: what is the size of those contracts?

what is the size of those contracts?

October 24, 2026

Each standard NYMEX Henry Hub natural gas futures contract (ticker: NG) represents 10,000 MMBtu (Million British Thermal Units) of natural gas. [1]

To put the scale of that speculative bet into perspective:

• Single Contract Value: At a market price of roughly $3.05/MMBtu, a single standard contract controls $30,500 worth of natural gas.
• The Short Position: The 505,747 short contracts held by speculators represent a staggering 5.06 trillion BTUs of natural gas, with a nominal market value of over $15.4 billion.
• The Net Position: The net short position of 241,272 contracts means speculators are net-short roughly 2.41 trillion BTUs, giving the “crowded trade” a net financial exposure of roughly $7.3 billion betting on lower prices.

(Note: Every 1-cent move in the price of natural gas shifts the value of just one standard contract by $100). [1]

Would you like to calculate how much a 10% or 20% short-squeeze price spike would financially impact this net short position?

• 

  CME Group

  Henry Hub Natural Gas Futures Overview – CME Group

  Features and benefits * Deep, liquid market. 400K contracts are traded daily, with 1.7M of open interest. * Capital efficiency. Co…

   

   

• Henry Hub Natural Gas Futures (NYMEX NG)

  $10.00 per contract Value of a 1¢ move $100 per contract Contract months Every month. Trading hours 5:00 pm – 4:00 pm CT, Sun–Fri,

•  

how does the natural gas represented by that short position compare to daily natural gas production?

October 24, 2026

To understand how massive this speculative bet is, we have to look at the physical volume of the gas.

In the energy industry, physical natural gas production is measured in Bcf (Billion Cubic Feet). For pipeline-quality “dry” natural gas, 1,000 MMBtu is roughly equivalent to 1 million cubic feet (MMcf), meaning 1 million MMBtu equals 1 Bcf.

Right now, U.S. dry natural gas production is hovering near record highs, averaging approximately 111.6 Bcf per day. [1]

Here is how the speculative positions stack up against the nation’s entire daily output:

The Total Short Position: ~45 Days of U.S. Production

The 505,747 short contracts equal 5.06 trillion MMBtu (or 5,057 Bcf).

• This means the total short position represents roughly 45 days’ worth of the entire United States’ natural gas production completely shorted by speculators.

⚖️ The Net Short Position: ~22 Days of U.S. Production

The net short position (shorts minus longs) of 241,272 contracts equals 2.41 trillion MMBtu (or 2,413 Bcf).

• This net speculative downside bet is equivalent to roughly 22 days of total U.S. natural gas production.

Why This Matters for the Market

In the physical world, natural gas is an incredibly high-volume, continuously moving commodity with expensive and limited storage capacity. The fact that financial speculators hold paper contracts representing nearly a month and a half of the country’s entire physical output explains why natural gas is famously volatile. [1]

If weather models suddenly shift colder, trying to “buy back” 45 days of production on paper creates a massive bottleneck, as there isn’t enough uncommitted physical gas in the world to easily satisfy those financial contracts—the core engine behind a violent short squeeze.

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Would you like to explore how current national storage inventory levels (the “cushion” sitting in underground caverns) compare to this short position as we head toward winter? [1]

AI responses may include mistakes. For financial advice, consult a professional. Learn more

•  

  EnergyNow.com

  US Natural Gas Output, Demand to Hit Record Highs in 2026 …

  The agency forecast average U.S. liquefied natural gas exports would rise from a record 15.1 bcfd in 2025 to 17.4 bcfd in 2026 and…

• 

  Committee on Homeland Security & Governmental Affairs (.gov)

  EXCESSIVE SPECULATION IN THE NATURAL GAS MARKET

  location, which for natural gas futures contracts is the Henry Hub in Louisiana. Similarly, a trader that is a net seller of futur…

   

• 

  Investing.com India

  Natural Gas Holds Steady As EIA Reports Smaller Than …

  Average natural gas production across the Lower 48 states declined to 111.6 billion cubic feet per day in October from record high…

   

•  

yes, explain how the current national storage inventory levels compares to this short position

October 24, 2026

According to the latest EIA Weekly Natural Gas Storage Report released on October 22, 2026, total U.S. working gas in underground storage stands at 3,644 Bcf (Billion Cubic Feet). [1]

Comparing the massive speculative short position (505,747 contracts) against this actual physical “cushion” reveals why this crowded trade is highly sensitive to a market disruption.

Speculative Position vs. National Inventory

Metric
Physical Volume Equivalent
% of Total National Storage

Total National Storage Inventory
3,644 Bcf
100%

Speculator Gross Short Position
5,057 Bcf
138.8%

Speculator Net Short Position
2,413 Bcf
66.2%

The Critical Takeaways

• The Paper Deficit: The total gross short position (5,057 Bcf) actually exceeds the entire amount of physical natural gas sitting in U.S. storage by nearly 39%. Financial speculators have sold more “paper gas” than currently exists in underground caverns.
• The Net Footprint: The net short position (2,413 Bcf) represents roughly two-thirds (66.2%) of all the natural gas stored in the country.

Why This Thins the “Bearish Cushion”

Bears have been heavily shorting the market because total storage is technically adequate—sitting 35 Bcf above its historical 5-year average. However, the “cushion” is rapidly thinning: [1]

1. The Declining Surplus: This 35 Bcf surplus over the 5-year average has shrunk from 45 Bcf the prior week, marking a steady 10-week decline. [1]
2. Deep Deficits in the Gulf Coast: In the critical South Central region (home to high-deliverability salt caverns that feed LNG export terminals), inventories are actually 3.4% below the 5-year average, with salt cavern storage down 14.9%. [1, 2]

The Short-Squeeze Engine: If a sudden freeze hits in November, utilities will draw heavily from storage. Speculators trying to cover their 2,413 Bcf net short position will be competing for a limited pool of available supply, particularly on the Gulf Coast where physical delivery points like the Henry Hub Pipeline System are already structurally tight. [1, 2]

we now resume our regular program​ming…

The Latest US Oil Supply and Disposition Data from the EIA

US oil data from the US Energy Information Administration for the week ending October 16th showed that despite a drop in our oil exports, another sizable drop in production from US wells meant we again had to pull oil from our stored crude supplies for the twenty-third time in twenty-six weeks, and for the 45th time in seventy-three weeks, albeit by much less than the prior week, which had been ​t​he largest draw in seven months…. Our imports of crude oil fell by an average of 291,000 barrels per day to average 5,758,000 barrels per day, after falling by an average of 791,000 barrels per day during the prior week, while our exports of crude oil fell by an average of 1,128,000 barrels per day to average 3,442,000 barrels per day, which, when used to offset our imports, meant that the net of our trade of oil worked out to an import average of 2,316,000 barrels of oil per day during the week ending October 16th, an average of 837,000 more barrels per day than the net of our imports minus our exports during the prior week… At the same time, transfers to our oil supplies from Alaskan gas liquids, from natural gasoline, from condensate, and from unfinished oils were 5,000 barrels per day lower than the prior week at 537,000 barrels per day, while during the same week, production of crude from US wells was 410,000 barrels per day lower 13,269,000 barrels per day.  Hence, our daily supply of oil from the net of our international trade in oil, from transfers, and from domestic well production appears to have averaged a total of 16,122,000 barrels per day during the October 16th reporting week…

Meanwhile, US oil refineries reported they were processing an average of 16,649,000 barrels of crude per day during the week ending October 16th, an average of 34,000 more barrels per day than the amount of oil that our refineries reported they were processing during the prior week, while over the same period, the EIA’s surveys indicated that an average net of 480,000 barrels of oil per day were being pulled out of the supplies of oil stored in the US… So, based on that reported & estimated data, the crude oil figures provided by the EIA appear to indicate that our total working supply of oil from storage, from net imports, from transfers, and from oilfield production during the week ending October 16th averaged 47,000 fewer barrels per day than what our oil refineries reported they used during the week.  To account for the difference between the apparent supply of oil and the apparent disposition of it, the EIA just plugged a rounded [ +47,000 ] barrel per day figure onto line 16 of the weekly U.S. Petroleum Balance Sheet, in order to make the reported data for the supply of oil and for the consumption of it balance out, a fudge factor that they label in their footnotes as “unaccounted for crude oil”, thus indicating there must have been a error or omission of that amount in the week’s oil supply & demand figures that we have just transcribed…. Since 308,000 barrels per day of demand for oil could not be accounted for in the prior week’s EIA data, that means there was a 355,000 barrel per day difference between this week’s oil balance sheet error and the EIA’s crude oil balance sheet error from a week ago, and hence the changes to supply and demand from that week to this one that are indicated by this week’s report are somehow off by that much, and are therefore not very useful….However, since most oil traders react to the figures in these weekly EIA reports as if they were gospel, and since these weekly figures therefore often drive oil pricing and hence decisions to drill or complete oil wells, we’ll continue to report this data just as it’s published, and just as it’s watched & believed to be reasonably reliable by most everyone in the industry…(for more on how this weekly oil data is gathered, and the possible reasons for that “unaccounted for” oil supply, see this EIA explainer….also see this March 2023 twitter thread from an EIA administrator addressing these ongoing weekly errors, and what they had once hoped to do about it).

This week’s rounded 480,000 barrel per day average decrease in our overall crude oil inventories came as an average of 437,000 barrels per day were being pulled out of our commercial stocks of crude oil, while 43,000 barrels per day were being pulled out of our Strategic Petroleum Reserve, the twenty-ninth Iran war related withdrawal from the SPR in the past 30 weeks, which left the SPR level at 282,683,000 barrels, the lowest since​ October ​15, 1982​, during its ​i​nitai fillup……with both commercial oil and the SPR ​i​nventories down this week, that left the Total of all US Oil Supplies at 695,200,000 barrels, down 20.2% from 870,774,000 barrels on April 17th, and the lowest since October 7th, 1983….

Further details from the weekly Petroleum Data Overview (pdf) indicated that the 4 week average of our oil imports fell to 6,086,000 barrels per day last week, which was 2.8% more than the 5,920,000 barrel per day average that we were importing over the same four-week period last year, while the four week average of our exports rose to 4,087,000 barrels per day last week, which was 2.1% more than the 4,003,000 barrel per day average that we were exporting last year year at this time… This week’s crude oil production was reported to be 410,000 barrels per day lower at 13,269,000 barrels per day as the EIA’s estimate of the output from wells in the lower 48 states was 457,000 barrels per day lower at 12,757,000 barrels per day, while Alaska’s oil production was 47,000 barrels per day higher at 512,000 barrels per day…US crude oil production had reached a pre-pandemic high of 13,100,000 barrels per day during the week ending March 13th 2020, so this week’s reported oil production figure was still 1.3% higher than that of our pre-pandemic production peak, and was also 36.8% above the pandemic low of 9,700,000 barrels per day that US oil production had fallen to during the third week of February of 2021.

US oil refineries were operating at 93.4% of their capacity while processing those 16,649,000 barrels of crude per day during the week ending October 16th, down from 93.5% the prior week, which had been the highest October utilization rate since 2003….however, the 16,615,000 barrels of oil per day that were refined that week were still the most barrels refined in any October week on record, 5.8% more than the 15,730,000 barrels of crude that were being processed daily during the week ending October 17th of 2025, and 4.9% more than the 15,865,000 barrels that were being refined during the pre-pandemic week ending October 18th, 2019, when our refinery utilization rate was at 85.2%, which was well below the pre-pandemic normal utilization rate for this time of year, probably due to the historic flooding across southeast Texas in the wake of Tropical Storm Imelda of that year…

With the increase in the amount of oil that was being refined this week, gasoline output from our refineries finally higher, increasing by 518,000 barrels per day to 9,750,000 barrels per day during the week ending October 16th, after our refineries’ gasoline output had decreased by 117,000 barrels per day to a 33 week low during the prior week… This week’s gasoline production was 1.6% more than the 9,594,000 barrels of gasoline that were being produced daily over the week ending October 17th of last year, but 3.4% less than the gasoline production of 10,098,000 barrels per day seen during the prepandemic week ending October 18th, 2019….at the same time, our refineries’ production of distillate fuels (diesel fuel and heat oil) increased by 43,000 barrels per day to 5,232,000 barrels per day, after our distillates output had decreased by 101,000 barrels per day during the prior week.  After that production increase, our distillates output was 13.0% more than the 4,632,000 barrels of distillates that were being produced daily during the week ending October 17th of 2025, and 9.8% more than the 4,765,000 barrels of distillates that were being produced daily during the pre-pandemic week ending October 18th, 2019….

Even with this week’s increase in our gasoline production, our supplies of gasoline in storage at the end of the week fell for the twenty-seventh time in thirty-six weeks, decreasing by 2,952,000 barrels to 205,310,000 barrels during the week ending October 16th, after our gasoline inventories had increased by 3,518,000 barrels during the prior week.  Our gasoline supplies fell this week because the amount of gasoline supplied to US users rose by 575,000 barrels per day to 8,982,000 barrels per day, and because our exports of gasoline rose by 134,000 barrels per day to 926,000 barrels per day, and because our imports of gasoline fell by 227,000 barrels per day to a 23 month low of 281,000 barrels per day.. After fifty-seven gasoline inventory withdrawals over the past eighty-seven weeks, our gasoline supplies were 5.2% lower than last October 17th’s gasoline inventories of 216,679,000 barrels, and were about 4% below the five year average of our gasoline supplies for this time of year…

After this week’s increase in distillates production, our supplies of distillates rose for the nineteenth time in thirty-six weeks, increasing by 1,675,000 barrels to 104,286,000 barrels during the week ending October 16th, after our distillates supplies had decreased by 2,527,000 barrels during the prior week… Our distillates supplies rose this week because the amount of distillates supplied to US markets, an indicator of domestic demand, fell by 591,000 barrels per day to 3,732,000 barrels per day, and even as our exports of distillates rose by 6,000 barrels per day to 1,379,000 barrels per day, while our imports of distillates fell by 28,000 barrels per day to 117,000 barrels per day… After 33 withdrawals from distillates inventories over the past 66 weeks, our distillates supplies at the end of the week were 9.7% below the 115,551,000 barrels of distillates that we had in storage on October 17th of 2025, and were about 9% below the five year average of our distillates inventories for this time of the year…

Finally, after the hurricane induced drop in our well production, our commercial supplies of crude oil in storage fell for the 18th time in twenty-six weeks, for the 28th time over the past year, decreasing by 3,060,000 barrels over the week, from 415,577,000 barrels on October 9th to 412,517,000 barrels on October 16th after our commercial crude supplies had decreased by 3,186,000 barrels over the prior week….After this week’s decrease, our commercial crude oil inventories were about 3% below recent five-year average of commercial oil supplies for this time of year, while they were about 17% above the average of our available crude oil stocks as of the third weekend of October over the 5 years at the beginning of the past decade, with the difference between those comparisons arising because it wasn’t until early 2015 that our oil inventories had first topped 400 million barrels. After our commercial crude oil inventories had jumped to record highs during the Covid lockdowns in the Spring of 2020, then jumped again after February 2021’s winter storm Uri froze off US Gulf Coast refining, but then fell sharply due to increased exports to Europe following the onset of the Ukraine war, only to jump again following the Christmas 2022 refinery freeze-offs, changes in our commercial crude inventories had been less extreme up until the onset of the Iran war, when they were initially built up to a three year high by mid-April, before falling to the lowest in nearly eight years by late July…This week’s decrease followed the largest in eight months last week, so as of October 16th our commercial crude inventories were 2.4% below the 422,824,000 barrels of oil we had in commercial storage on October 17th of 2025, and 3.2% less than the 426,024,000 barrels of oil that we had in storage on October 18th of 2024, and 2.0% less than the 421,120,000 barrels of oil we had left in commercial storage on October 20th of 2023…

With this week’s drop in both commercial crude and SPR oil inventories, that also meant that the week ended with the total US stocks of crude oil and petroleum products down by 8,754,000 barrels to 1,498,245,000 barrels, the lowest for that total liquids supply figure since May 23, 2003…

This Week’s Rig Count

The US rig count was unchanged for a second week over the week ending October 23rd, as the number of rigs targeting oil was up by one, the count of rigs targeting natural gas was down by one, and miscellaneous rigs were unchanged…for a quick snapshot of this week’s rig count, we are again including below a screenshot of the rig count summary table from Baker Hughes…in the table below, the first column shows the active rig count as of October 23rd, the second column shows the change in the number of working rigs between last week’s count (October 16th) and this week’s (October 23rd) count, the third column shows last week’s October 16th active rig count, the 4th column shows the change between the number of rigs running on Friday and the number running on the Friday of the same week of a year ago, and the 5th column shows the number of rigs that were drilling at the end of that reporting period a year ago, which in this week’s case was Friday, the 24th of October, 2025…

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September’s consumer & producer prices, retail sales, industrial production, and existing home sales; August’s business inventories

Widely watched reports that were released last week included the September Consumer Price Index, the September Producer Price Index, and the September Import and Export Price Indexes, all from the Bureau of Labor Statistics, the Retail Sales report for September and the corresponding Business Sales and Inventories report for August, both from the Census Bureau, the report on Industrial production and Capacity Utilization for September from the Fed, and the Existing Home Sales Report for September from the National Association of Realtors (NAR)….

In addition, this week also saw the release of the first two regional Fed manufacturing surveys for October: the Empire State Manufacturing Survey for October from the New York Fed, which covers New York, northern New Jersey, and an adjacent county in Connecticut, reported their headline general business conditions index rose from +7.6 in September to +25.5 in October, the highest in almost five years, meaning that a significant majority of Second District manufactures reported improving metrics in various facets of their business during the current month…meanwhile the Philadelphia Fed Manufacturing Survey for October, covering most of Pennsylvania, southern New Jersey, and Delaware, reported its broadest diffusion index of manufacturing conditions fell from +37.8 in September to +29.0 in October, an index value they arrived at because “41 percent of the firms reported increases in activity (down from 45 percent last month), and 20 percent reported decreases (up from 8 percent); while 27 percent of the firms reported no change in current activity (down from 45 percent)”

CPI Rose 0.6% in September on Higher Prices for Fuel, Housing, Hospital Services, etal

The consumer price index was 0.6% higher in September, as higher prices for fuel, rent, new and used cars and trucks, vehicle rentals, vehicle maintenance and repairs, motor oil, intracity public transportation, air fares, lodging away from home, eating out, dental and hospital services, checking and banking services, college tuition and fees, computers, telephone hardware, telephone services, sports vehicles, toys, boys’ apparel, and admissions to sporting events were only partly offset by lower prices for groceries, utility gas, prescription drugs, furniture, window and floor coverings, appliances, TVs, video rentals, personal care products, health insurance, moving expenses, internet services, tax preparation, and admissions to movies, theaters, and concerts….the Consumer Price Index Summary from the Bureau of Labor Statistics indicated that the weighted average of seasonally adjusted prices for consumer goods and services was 0.6% higher in September, after being 0.4% higher in August, 0.1% higher in July, 0.4% lower in June, 0.5% higher in May, 0.6% higher in April, 0.9% higher in March, 0.3% higher in February, 0.2% higher in January, 0.3% higher in December, after being 0.2% higher the two months ending in November 0f 2025, and 0.3% higher in September of last year….

The unadjusted CPI-U index, which was originally set to have prices of the 1982 to 1984 period equal to 100, rose from 334.980 in August to 336.940 in September, which left it 3.7376847% higher than the index reading of 324.800 from September of last year, which is reported as a 3.7% year over year increase, up from the 3.4% year over year increase that was reported for August, with that widely cited year over year change simply reflecting the effect of last September’s rounded +0.3% increase dropping out of the comparison and being replaced by the current month’s rounded +0.6%, and not telling us anything more about inflation beyond that….with barely changed prices for food but much higher prices for energy this month, seasonally adjusted core prices, which exclude both food and energy, were 0.3% higher over the month, as the unadjusted core price index rose from  338.041 in August to 339.287 in September, which left the core index 2.564358% ahead of its year ago reading of 330.804, which is reported as a 2.6% year over year increase, up from the 2.4% year over year core price increase that was reported for August, but well below the 6.6% annual increase reported for September of 2022, which had been the largest annual increase in core prices in forty years…

The volatile seasonally adjusted energy price index was 5.2% higher in September, after being 2.1% higher in August, 1.5% lower in July, 5.7% lower in June, 3.9% higher in May, 3.8% higher in April, 10.9% higher in March, 0.6% higher in February, 1.5% lower in January, 0.3% higher in December, 1.1% higher in November, and 1.5% higher last September, and is now 20.4% higher than in September of a year ago….the price index for energy commodities was 9.3% higher in September, on a 9.1% increase in the price index for gasoline and a 15.3% increase in the price index for fuel oil, while the price index for “other energy commodities”, including propane, kerosene, and firewood, averaged out to be 0.2% higher….meanwhile, the price index for energy services was 0.1% higher, after falling 0.4% in August, as the price index for utility gas service was 0.3% lower in September, but is still 5.0% higher than it was a year ago, while the electricity price index was 0.2% higher, after falling 0.2% in August…. energy commodities are now averaging 35.3% above their year ago levels, with gasoline prices averaging 34.2% higher than they were a year ago, while the energy services price index is up 4.6% from last September, as electricity prices are now averaging 4.0% higher than a year ago…

Meanwhile, the seasonally adjusted food price index was virtually unchanged in September, after being 0.1% higher in August, 0.1% higher in July, 0.2% higher in June, 0.2% higher in May, 0.5% higher in April, unchanged in March, 0.4% higher in February, 0.2% higher in January, 0.7% higher in December, 0.1% higher over the two months ending last November, and after being 0.2% higher last September, and is still 2.5% higher than a year ago….the price index for food purchased for use at home was 0.1% lower in September, while the price index for food bought to eat away from home was 0.2% higher, as average prices at fast food outlets was 0.3% higher and average prices at full service restaurants was 0.2% higher, while the price index for food at employee sites and schools was 0.5% higher, and prices for other food away from home were virtually unchanged…

In the food at home categories, the price index for cereals and bakery products was 0.1% higher, even as average bread prices fell 0.1%, as the price index for breakfast cereal rose 0.9%, the price index for rice, pasta,and cornmeal rose 1.2%, the price index for fresh sweetrolls, coffeecakes, doughnuts was 1.9% higher, and the price index for fresh frozen and refrigerated bakery products, pies, tarts, turnovers was 4.0% higher.…on the other hand, the price index for the meats, poultry, fish, and eggs food group was 0.5% lower, as the price index for beef and veal fell 1.0%, the price index for pork also fell 1.0%, and egg prices were 1.3% lower….in addition, the seasonally adjusted price index for dairy products was 0.9% lower, even as average milk prices fell 2.0%, as the price index for ice cream and related products fell 1.3% and the price index for other dairy products (not including cheese) was 0.8% lower …on the other hand, the fruits and vegetables price index was 0.5% higher, as the price index for fresh fruit rose 0.8%, the price index for canned vegetables rose 0.5, and the price index for frozen vegetables was 1.4% higher.…at the same time, the beverages price index was 0.9% higher, as the price index for carbonated drinks rose 1.2%, the price index for noncarbonated juices and drinks rose 1.0%, and the price index for coffee was 0.9% higher….lastly, the price index for the ‘other foods at home’ category was 0.2% lower, as the price index for butter and margarine fell 2.3%, the price index for olives, pickles, and relishes fell 1.6%, the price index for snacks fell 1.6%, and the price index for baby food and formula was 1.0% lower…

Among the seasonally adjusted core components of the CPI, which was 0.3% higher in September, after being 0.3% higher in August, 0.2% higher in July, unchanged in June, after rising by 0.2% in May, by 0.4% in April, 0.2% in March, by 0.2% in February, by 0.3% in January, by 0.2% in December, by 0.2% over the two months ending in November, and by 0.3% last September, the composite price index of all goods less food and energy goods was 0.3% higher in September, while the more heavily weighted composite index for all services less energy services was 0.4% higher..

Among the goods components of the core price index, which will initially be used by the Bureau of Economic Analysis to adjust September’s retail sales for inflation in national accounts data, the price index for household furnishings and supplies was 0.2% lower, as the price index for furniture and bedding fell 0.8%, the price index for appliances fell 0.7%, the price index for window and floor coverings fell 2.4%, and the price index for household paper products was 1.4% lower….on the other hand, the apparel price index was 0.3% higher, on a 1.9% increase in the price index for men’s suits, sport coats, and outerwear, a 5.0% increase in the price index for boys’ apparel, a 2.3% increase in the price index for infants’ and toddlers’ apparel, a 2.7% increase in the price index for boys’ and girls’ footwear, and a 1.9% increase in the price index for jewelry and watches…. at the same time, the price index for transportation commodities other than fuel was was 0.4% higher, as average prices for new cars rose 0.4%, average prices for used cars and trucks were 0.7% higher, the price index for tires rose 0.4%, and the price index for motor oil, coolant, and fluids was 1.0% higher….on the other hand, the price index for medical care commodities was 0.7% lower, as the price index for medicinal drugs fell 0.8% while the price index for medical equipment and supplies was 0.4% higher…meanwhile , the recreational commodities index was 0.9% higher, even as the price index for televisions fell 1.9%, as the price index for other video equipment rose 4.5%, the price index for audio equipment rose 1.4%, the price index for sports vehicles including bicycles rose 0.9%, the price index for recreational reading materials rose 2.2%, the price index for music instruments and accessories rose 1.0%, and the price index for toys, games, hobbies and playground equipment was 5.1% higher… at the same time, the education and communication commodities index was also 0.9% higher, as the price index for computers, peripherals, and smart home assistants rose 1.4%, and the price index for telephone hardware, calculators, and other consumer information items including smartphones was 0.6% higher.…lastly, a separate price index just for alcoholic beverages was unchanged, while the price index for ‘other goods’ was 0.1% higher on an 0.8% increase in the price index for cigarettes, an 0.8% increase in the price index for hair, dental, shaving, and miscellaneous personal care products, and a 2.9% increase in the price index for stationery, stationery supplies, and gift wrap…

Within core services, the price index for shelter was 0.4% higher, as rents rose 0.2%, and homeowner’s equivalent rent rose 0.3%, and prices for lodging away from home at hotels and motels were 2.0% higher, while the price index for tenants and household insurance was 0.2% higher, and the price index for water, sewer and trash collection services was also 0.2% higher, but the price index for moving, storage, freight expense was 2.3% lower … at the same time, the price index for medical care services was 0.3% higher, as the price index for dental’ services rose 0.5%, and the price index for outpatient hospital services  rose 1.4%, while the price index for health insurance was 0.2% lower….in addition, the transportation services price index was 0.5% higher, as the price index for airline fares rose 1.2%, the price index for intracity public transportation rose 2.2%, the price index for car and truck rental rose 5.4% and the price index for motor vehicle maintenance and repair rose 0.7%….at the same time, the recreation services price index was 0.3% higher, as the price index for cable, satellite, and live streaming television services rose 0.6%, the price index for veterinarian services rose 0.3%, and the price index for admission to sporting events was 7.6% higher…meanwhile, the price index for education and communication services was unchanged, as the price index for college tuition and fees rose 1.2% and the price index for delivery services was 1.7% higher, while the price index for wireless telephone services fell 0.5% and the price index for internet services and electronic information providers was 1.3% lower.…lastly, the price index for other personal services was 0.4% higher, as the price index for checking account and other bank services rose 2.7%,  the price index for laundry and dry cleaning rose 0.5%, and the price index for apparel services other than laundry and dry cleaning was 0.9% higher…

Retail Sales Rose 0.8% in September after Prior Monthly Sales were Revised Lower

The seasonally adjusted value of retail sales rose 0.8% in September after retail sales for July & August were revised lower, due to an annual revision based on historical corrections and the results of the 2023 and 2024 Annual Integrated Economic Survey, which revised retail sales figures going back to 1992….the Advance Retail Sales Report for September (pdf) from the Census Bureau estimated that our seasonally adjusted retail and food services sales totaled $745.0 billion during the month, which was 0.8 percent (±0.4 percent) higher August’s revised sales of $739.3 billion, and 6.3 percent (±0.5 percent) above the adjusted sales in September of last year….as a result of the annual revision, August’s seasonally adjusted sales were revised 4.5% lower, from $773.9 billion to $739.3 billion, and July sales were also revised 4.5% lower, from $764.5 billion to $729.9 billion, but the July to August percent change was still revised from up 1.2 percent (±0.4 percent) to up 1.3 percent (±0.1 percent)….unadjusted sales estimates, extrapolated from surveys of a small sampling of retailers, indicated sales actually fell 3.2%, from $750,707 million in August to $727,033 million in September, while they were 6.8% higher than the $680,630 million of sales of September a year ago…

Since it’s the end of the quarter for retail sales, we’ll include the entire table from this report showing the change in retail sales by business type, including the quarter over quarter data…again, to explain what this table shows, the first double column below shows us the seasonally adjusted percentage change in sales for each kind of business from the August revised figure to this month’s September “advance” report figure in the first sub-column, and then the year over year percentage sales change since last September in the 2nd column; the second double column pair below gives us the revision of the August advance estimates (now called “preliminary”) as of this report, with the new July to August percentage change under “Jul 2026 (r)” (revised) and the August 2025 to August 2026 percentage change as revised in the 2nd column of the pair.. (for your reference, the table of last month’s advance estimate of August sales, before this month’s revisions, is here)…. lastly, the third pair of columns below shows the percentage change of the most recent 3 months of this year’s sales (July, August and September) from the preceding three months of the 2nd quarter (April, May and June) and then from the same three months (July, August and September) of a year ago….Note that the first column of that pair gives us a snapshot comparison of 2nd quarter sales to third quarter sales which, after adjustment for price changes, could be useful in estimating the impact of this report on 3rd quarter GDP….

To compute September’s real personal consumption of goods data for national accounts from this September retail sales report, the BEA will initially use the corresponding price changes from the September consumer price index, which we reviewed above…to estimate what they will find, we’ll start by pulling out the usually volatile sales of gasoline from the other totals…from the third line on the above table, we can see that September retail sales excluding the 6.4% price related increase in sales at gas stations were up by 0.2%….then, subtracting the figures representing the 0.4% increase in grocery & beverage sales and the 1.1% increase in food services sales from that total, we find that core retail sales were up by less than 0.1% for the month….since the CPI report showed that the composite price index of all goods less food and energy goods was 0.3% higher in September, we can thus figure that real retail sales excluding food and energy were down by more than 0.2% month over month…however, the adjustment for each of the types of sales shown above will vary by the change in the related price index…for instance, while nominal sales at health and personal care stores stores were up 0.7%, the price index for medical care commodities was 0.7% lower, which would mean that real unit sales drug stores would have been around 1.4% higher…meanwhile, while sales at clothing stores were unchanged in September, the apparel price index was 0.3% higher at the same time, which would suggest that real sales of clothing were about 0.3% lower…

In addition to figuring those core retail sales, to make a complete estimate of real September PCE, we would need to adjust food and energy retail sales for their price changes separately, just as the BEA will do….the September CPI report showed that the food price index was unchanged in September, with the price index for food purchased for use at home 0.1% lower, while prices for food bought at restaurants averaged 0.2% higher… hence, while nominal sales at food and beverage stores were up 0.4%, real sales of food and beverages would be roughly 0.5% higher in light of 0.1% lower prices.…similarly, the 1.1% increase in nominal sales at bars and restaurants, once adjusted for 0.2% higher prices, suggests that real sales at bars and restaurants were 0.9% higher….and while sales at gas stations were up 6.4%, there was a 9.1% increase in the price index for gasoline, which would suggest real sales of gasoline were down by nearly 2.5%, with the caveat that gasoline stations do sell more than gasoline, products which should not be adjusted with gasoline prices, so the decrease in real sales at gas stations was likely somewhat less than our imputed estimate…by reweighing and averaging the real sales changes that we have thus estimated back together, and excluding food services, we can then estimate that the income and outlays report for September will show that real personal consumption of goods fell by almost 0.4% in September*, after rising by a revised 1.4% in August, but after falling by 0.5% in July, and after rising by in June, rising by 0.9% in May, and after rising by 0.4% in April…..at the same time, the 0.9% increase in real sales at bars and restaurants would have a modest positive impact on September’s real personal consumption of services…

*Note: we again have a low confidence in that result because of the unlikely 2.5% decrease in gasoline consumption implied by the figures; without gasoline, our estimate would show that September’s real PCE goods would only be 0.1% lower…also note that the 4.5% downward revision to July and August’s retail sales resulting from the annual revision may skew 3rd quarter GDP figures, because while the BEA will use the revised figures for 3rd quarter PCE goods, they historically leave prior quarters unchanged until the next annual revision, which now won’t come until  September 2027…one would think they’d have to make an adjustment in this case, but in the 15 years or so i’ve been watching them, i can’t recall that they’ve ever done so..

Industrial Production Rose 0.7% in September on Record Cooling Demand

The Fed’s G17 release on Industrial production and Capacity Utilization indicated that industrial production increased by 0.7% in September, after increasing by a revised 0.1% in August, which was revised from the virtually unchanged increase previously reported, leaving industrial production 2.2% higher than in September a year ago, up from the 1.4% year over year increase reported a month ago…..the industrial production index, with the benchmark now set for average 2017 production to equal to 100.0, rose from a revised 103.3 in August to 104.0 September; after the index for August was revised from the previously reported 103.1 to 103.3, the index for July was revised from the previously reported 103.0 to 103.2, the index for June was revised from the previously reported 102.8 to 103.0, and the index for May was revised from the previously reported 102.6 to 102.7, while the April index of 102.6 was revised but unchanged from the previous report….

The manufacturing index, which accounts for more than 75% of the total IP index, increased by 0.3% in September, from 98.2 in August to 98.4, after August’s manufacturing index was revised but unchanged at 98.2 and July’s manufacturing index was revised but unchanged at 98.4….meanwhile, the mining index, which includes oil and gas well drilling, rose by 0.2%, from 124.3 in August to 124.5 in September, after the August mining index was revised up from 122.7, and is now 2.8% higher than it was a year ago….finally, the utility index, which often fluctuates due to above or below normal temperatures because seasonal adjustment is to the norm, rose 3.5% to 117.3 in our record hot September, after the August index was revised up from 113.0 to 113.3, leaving the utility index 8.7% higher than in September of a year ago…

This report also includes capacity utilization data, which is expressed as the percentage of our plant and equipment that was in use during the month, and which indicated that seasonally adjusted capacity utilization for total industry rose from 76.4% in August to 76.9% in September, after August utilization was unchanged from July….capacity utilization of NAICS durable goods production facilities was unchanged at 76.0% in September, after August’s utilization of durable manufacturing was revised up from 75.8%, while capacity utilization for non-durables producers rose from 75.5% to 75.8%…capacity utilization for the mining sector rose to 87.5% in September from 87.4% in August, which itself was revised up from the previously reported 86.3%, while utilities were operating at 73.8% of capacity during September, up from their 71.5% of capacity during August, which was revised up from 71.3%…for more details on capacity utilization by type of manufacturer, see Table 7: Capacity Utilization: Manufacturing, Mining, and Utilities, which shows the historical capacity utilization figures for a dozen types of durable goods manufacturers, 8 classifications of non-durable manufacturers, mining, utilities, and capacity utilization for a handful of other special categories….

Producer Price Index Rose 1.3% in September on Higher Energy & Transportation Prices

The seasonally adjusted Producer Price Index (PPI) for final demand was 1.3% higher September, the largest price increase since March 2022, as the final demand price index for wholesale goods rose 2.6%, while the more heavily weighted price index for final demand for services was 0.8% higher…that September jump in the PPI followed a revised 0.5% increase in August, when the final demand price index for wholesale goods rose 1.1%, and price index for final demand for services was 0.2% higher, and followed a revised 0.2% increase in July, when the final demand price index for wholesale goods fell 0.4%, but the price index for final demand for services was 0.3% higher, and a revised 0.1% decrease in June, when the final demand price index for wholesale goods fell 1.4%, while the price index for final demand for services was 0.5% higher, and a revised 0.5% PPI increase in May, when the final demand price index for wholesale goods rose 2.2%, while price index for final demand for services was 0.2% lower…those revised figures followed an unrevised 1.1% increase in April, when the final demand price index for wholesale goods rose 1.9% and the price index for final demand for services was 0.8% higher, and an 0.8% increase in March, when the final demand price index for wholesale goods rose 2.0%, while the price index for final demand for services was 0.3% higher, and followed an unrevised 0.5% increase in February, when the final demand price index for wholesale goods was 1.0% higher, and the price index for final demand for services was 0.3% higher, and an unrevised 0.6% increase in January, when the final demand price index for wholesale goods was 0.1% lower, but the price index for final demand for services was 0.9% higher, and an unrevised 0.4% PPI increase in December, when the final demand price index for wholesale goods was 0.1% lower, while the price index for final demand for services was 0.6% higher, and a  0.4% PPI increase in November, when the final demand price index for wholesale goods was 0.8% higher, and the price index for final demand for services was 0.3% higher, and followed the report of a 0.1% PPI increase last October, when the final demand price index for wholesale goods fell 0.2%, but the more heavily weighted price index for final demand for services was 0.2% higher, and also followed a 0.6% PPI increase last September, when the final demand price index for wholesale goods rose 0.6% and the price index for final demand for services was also 0.6% higher ….on an unadjusted basis, producer prices are now 6.3% higher than a year ago, while the core producer price index, which excludes food, energy and trade services, was 0.5% higher for the month. and is now 5.0% higher than it was a year ago…

As noted, the producer price index for final demand for goods was 2.6% higher September, after being 1.1% higher in August, 0.4% lower in July, 1.4% lower in June, 2.2% higher in May, 1.9% higher in April, 2.0% higher in March, 1.0% higher in February, 0.1% lower in January, 0.1% lower in December, 0.8% higher in November, 0.1% lower last October, and 0.6% higher last September, and is now 9.8% higher than a year ago….the final demand goods price index was 2.6% higher September because the price index for wholesale energy goods was 10.8% higher, after energy prices had been 4.5% higher in August, 1.7% lower in July, 6.8% lower in June, 8.2% higher in May, 7.1% higher in April, 10.5% higher in March, 2.0% higher in February, and 1.7% lower in January,  and because the price index for wholesale foods was 1.2% higher, after wholesale foods had been had been 0.3% lower in August, 1.0% lower in July, 0.6% lower in June, 0.6% higher in May, 0.3% higher in April, 0.6% lower in March, 2.3% higher in February, and 1.1% lower in January, and as the price index for final demand for core wholesale goods (excluding food and energy) was 0.3% higher in September, after it had been 0.4% higher in August, 0.2% higher in July, 0.2% higher in June, 0.7% higher in May, 0.7% higher in April, 0.4% higher in March, 0.4% higher in February. and 0.7% higher in January….

Wholesale energy prices were 10.8% higher in September on a 20.3% increase in wholesale prices for gasoline, a 21.0% increase in wholesale prices for No. 2 diesel fuel, an 18.8% increase in wholesale prices for home heating oil and distillates, and a 14.6% increase in wholesale prices for natural gas liquids, while the final demand for food price index was 1.2% higher on a 41.0% increase the wholesale price index for fresh and dry vegetables, a 17.4% increase in the wholesale price index for grains, and an 11.4% increase the wholesale price index for oilseeds… among core wholesale goods, the wholesale price index for industrial chemicals rose 0.9%, the wholesale price index for commercial furniture rose 0.6%, the wholesale price index for truck trailers rose 0.5%, and the wholesale price index for jewelry, platinum and karat gold was 0.9% higher…

Meanwhile, the price index for final demand for services was 0.8% higher in September, after being 0.2% higher in August, 0.3% higher in July, 0.5% higher in June, 0.2% lower in May, 0.8% higher in April, 0.3% higher in March, 0.3% higher in February, 0.9% higher in January, 0.6% higher in December, 0.2% higher in November, 0.2% higher in October, 0.6% higher last September, and 0.3% lower last August, and is now 4.9% higher than a year ago….the price index for final demand for trade services rose 1.4% in September, the price index for final demand for transportation and warehousing services rose 3.4%, and the core index for final demand for services other than trade, transportation, and warehousing services was 0.3% higher….

Among trade services, seasonally adjusted margins for TV, video, and photographic equipment and supplies retailers rose 8.2%, margins for major household appliance retailers rose 5.8%  and margins for apparel wholesalers were 7.5% higher, and margins for hardware, building materials, and supplies retailers were 4.9% higher, while margins for fuels and lubricants retailers were 25.0% lower….among transportation and warehousing services, average margins for truck transportation of freight rose 3.8%, margins for courier, messenger, and U.S. postal services rose 1.0%, and margins for airline passenger services were 5.0% higher….among the components of the core final demand for services index, the price index for application software publishing rose 3.7%, the price index for traveler accommodation services rose 5.6%, the price index for deposit services rose 2.2%, and the price index for arrangement of flights was 1.5% higher..

This report also showed the price index for intermediate processed goods was 2.5% higher in September, after being 1.8% higher in August, 0.4% lower in July, 1.1% lower in June, 2.7% higher in May, 2.6% higher in April, 3.0% higher in March, 1.5% higher in February, 0.1% higher in January, 0.1% higher in December, 0.6% higher in November, 0.1% lower last October, and 0.2% higher last September….the price index for intermediate energy goods rose 10.2% in September as refinery prices for No. 2 diesel fuel rose 21.0%, refinery prices for gasoline rose 20.3%, refinery prices for jet fuel rose 15.4%, and producer prices for natural gas liquids were 14.6% higher….at the same time, the price index for intermediate processed foods and feeds rise 0.4%, as the producer price index for prepared animal feeds rose 2.3% and the producer price index for refined sugar and byproducts was 0.7% higher…meanwhile, the core price index for intermediate processed goods less food and energy goods was 0.5% higher, as the producer price index for building paper and board rose 3.3%, the producer price index for steel mill products rose 2.2%, the producer price index for paperboard rose 1.5%, the producer price index for copper and brass mill shapes rose 1.4%, the producer price index for aircraft parts and auxiliary equipment rose 1.5%, and the producer price index for fabricated structural metal products was 1.4% higher….average prices for intermediate processed goods are now 14.1% higher than in September 2025, the 23rd year over year increase in 43 months, but are way off the 26.6% year over year increase of November 2021, which had been a 46 year high…

Meanwhile, the price index for intermediate unprocessed goods rose 8.4% in September, after rising 0.9% in August, falling 0.2% in July, falling 6.5% % in June, rising 3.0% in May and 1.9% in April, falling 0.2% in March, rising 5.9% in February, rising 4.3% in January, and 2.1% in December and 2.4% in November, after falling 1.3% last October,  and falling 0.5% last September….that was as the September price index for crude energy goods rose rose 22.2%, as crude oil prices rose 28.3%, unprocessed natural gas prices rose 5.1%, but coal prices were 0.1% lower… at the same time, the price index for unprocessed foodstuffs and feedstuffs was 0.8% higher, as the producer price index for corn rose 19.1%, the producer price index for wheat rose 10.2%, and the producer price index for slaughter turkeys was 2.7% higher….meanwhile, the index for core raw materials other than food and energy materials was 2.5% higher, on a 2.3% increase in the price index for nonferrous metal ores, an 0.9% increase in the price index for copper base scrap, and a 3.8% increase in the price index for recyclable paper….this raw materials price index is now 21.5% higher than a year ago, the 19th year over year increase in the past 44 months, which followed a run of twenty-seven consecutive year over year increases, which came after the annual change on this index had been negative from the beginning of 2019 through October of 2020…

Lastly, the price index for services for intermediate demand was 0.9% higher in September, after being 0.7% higher in August, 0.2% higher in July, 0.8% higher in June, 0.5% higher in May, 0.9% higher in April, 0.1% higher in March, 0.3% higher in February, 0.6% higher in January, 0.6% higher in December, 0.2% higher last November, 0.4% higher last October, and 0.3% higher last September.…the price index for intermediate trade services was 2.0% higher, as margins for margins for intermediate food wholesalers rose 7.6%, margins for intermediate hardware, building material, and supplies retailers, rose 4.9%, and margins for intermediate paper and plastics products wholesalers rose 3.6%….at the same time, the price index for transportation and warehousing services for intermediate demand was 1.8% higher, as the intermediate price index for truck transportation of freight rose 3.8%, the intermediate price index for water transportation of freight rose 0.8%, the intermediate index for air mail and package delivery services, excluding by USPS, rose 2.5%, and the intermediate index for transportation of passengers was 5.0% higher….in addition, the core price index for intermediate services other than trade, transportation, and warehousing services was 0.3% higher, as the intermediate price index for television advertising time sales rose 4.6%, the intermediate price index for executive search services also rose 4.6%, the intermediate price index for deposit services rose 2.2%, and the intermediate price index for traveler accommodation services services was 5.6% higher….over the 12 months ended in September, the price index for services for intermediate demand was 6.3 higher than it was a year earlier, the seventy-first  consecutive annual increase in this index, after it had briefly turned negative year over year at the onset of the pandemic, from April to August of 2020, even as the current annual increase is still lower than the record 9.5% year over year increase that was indicated for July 2021…

Business Sales Rose 1.1% in August; Business Inventories Rose 0.4%

After the release of the September retail sales report, the Census Bureau released the composite Manufacturing and Trade Inventories and Sales report for August (pdf), which incorporates the revised August retail data from that September report and the earlier published August wholesale and factory data to give us a complete picture of the business contribution to the economy for the month….according to the Census Bureau, total manufacturer’s and trade sales were estimated to be valued at a seasonally adjusted $2,123.5 billion  in August, up 1.1 percent (±0.1) from July’s revised sales, and up 10.2 percent (±0.3 percent) from August sales of a year earlier….note that total July sales were concurrently revised down from the originally reported $2,120.7 billion to $2,101.1 billion, but were now a 0.5% increase from June, revised from the 0.3% increase reported a month ago….

Meanwhile, total manufacturer’s and trade inventories, a major component of GDP, were estimated to be valued at a seasonally adjusted $2,818.8 billion at the end of August, up 0.4 percent (±0.1 percent) from July, and 4.6 percent (±0.4 percent) higher than in August a year earlier…the value of end of July inventories were revised from the originally reported $2,764.7 billion to $2,807.1 billion, and they are now shown as a 0.9% increase from June, vs the 0..8% increase previously reported…seasonally adjusted inventories of manufacturers were estimated to be valued at $972,382 million, up 0.5% from July, and inventories of retailers were valued at $882,176 million, 0.2% more than in July, while inventories of wholesalers were estimated to be valued at $964,199 million at the end of August, 0.5% higher than in July…

For GDP purposes, all inventories, including retail, are adjusted for inflation with appropriate component price indices of the producer price index…when we reviewed the September earlier, it indicated that the producer price index for August showed that aggregate prices for finished goods were on average 1.1% higher, that prices for intermediate processed goods were 1.8% higher, and that prices for unprocessed goods were 0.9% higher….retail inventories are all finished goods, as are about 70% of wholesale inventories, while factory inventories are roughly evenly split between the three stages of production… when we looked at factory inventories two weeks ago, we judged the real August inventory decrease to be smaller than the 2nd quarter decrease, and hence a positive for 3rd quarter GDP… then, with the release of the wholesale inventory report last week, we figured that while real wholesale inventories so far in the quarter were lower, that came after a larger 2nd quarter decrease, and hence would also be positive for 3rd quarter GDP…since the producer price index for August showed that prices for finished goods were on average 1.1% higher, that means that real retail inventories were roughly 0.9% lower for the month…however, since real retail inventories saw a modest increase in the second quarter, that decrease in real August retail inventories means that both the 2nd quarter inventory increase and the 3rd quarter decrease would be subtracted from the growth rate of 3rd quarter GDP…

Existing Home Sales Rose 1.5% in September on Lower Prices

The National Association of Realtors (NAR) reported that their seasonally adjusted tally of existing home sales rose 1.5% from August to September, the first increase in four months, projecting that 3.99 million homes would sell over an entire year if the September home sales pace were extrapolated over that year, a pace that was still 2.2% below the 4.08 million annual sales rate projected in September of a year ago…August sales, now shown at a 3.93 million annual rate, were revised from the 3.98 million annual rate reported a month ago …the NAR also reported that the median sales price for all existing-home types was $417,500 in September, 1.3% higher than in September a year earlier, which they say is “the 39th consecutive month of year-over-year price gains“….the NAR press release, which is titled “Existing-Home Sales Increased 1.5% in September, According to NAR Report“, is in easy to read plain English, so if you’re interested in the details on housing inventories, cash sales, distressed sales, first time home buyers, et al., you can easily find them in that press release…since sales of existing properties do not add to our national output, neither these home sales nor the prices for which these homes sell for are included in GDP, except insofar as real estate, local government and banking services are rendered during the home buying and selling process…

Since this report is entirely seasonally adjusted and at a not very informative annual rate, we like to look at the raw data overview (pdf), which gives us a close approximation to the actual number of homes that sold each month…that unadjusted data indicates that roughly 341,000 homes sold in September, down 4.7% from the 358,000 homes that sold in August, and 3.9% fewer homes than the 355,000 homes that sold in September of last year, so we can see that the seasonal adjustment gave a large enough boost to the headline changes published in the Realtor’s press release to turn them positive….that same pdf indicates that the median home selling price for all housing types fell for a third consecutive month, from a revised $427,700 in August to $417,500 in September, and is now down 5.7% from the $442,800 median sales price of June.…regional median home sales prices ranged from a low of $329,600 in the Midwest, to a high of $613,600 in the West, with prices in the Northeast falling 3.4% in the current report, from $542,100 in August to $523,600 in September, even as they were still 4.7% higher than a year earlier…

(the above is the synopsis that accompanied my regular sunday morning news links emailing, which in turn was mostly selected from my weekly blog post on the global glass onion…if you’d be interested in receiving my weekly emailing of selected links, most of which are chosen from the aforementioned GGO posts, contact me…)

US oil supplies are lowest in 42½ years; US stocks of oil and oil products lowest in 23 years; barrels refined is October record

largest one week oil price jump in 3 months; total US oil supplies are the lowest since March 23rd, 1984; US stocks of crude oil and petroleum products are the lowest since May 23, 2003…largest oil inventory draw since February 13th; the highest October US refinery utilization rate since 2003; barrels refined were the most in any October week on record, but gasoline production from those refineries was the lowest in 33 weeks; gasoline demand  was at a 32 week low; gasoline exports were at  a 33 week low; distillates demand was at a 34 week high…

US oil prices finished higher for the fifth time in seven weeks after Houthi missile barrages struck the Saudi’s International Airport in Riyadh and Saudi Aramco’s headquarters in Dhahran, Iran sunk ​t​wo cargo ship​s and hit ​a​t least a dozen others in the Strait of Hormuz, and US oil supplies fell by the most since February…after rising 0.8% to $91.85 a barrel last week on increased attacks on oil tankers in the Strait of Hormuz and as the first Gulf hurricane of the year shut down a quarter of U.S. offshore oil production, the contract price for the benchmark US light sweet crude for November delivery edged lower during early Asian trading on Monday, as markets weighed the possibility of more diesel supplies after US President Trump said Russia would supply additional diesel to the US and global markets, but erased those early losses to climb to nearly a two-week high as renewed Houthi attacks on Saudi Arabia and attacks on tankers near the Strait of Hormuz heightened fears over the security of critical oil supply routes, and then reached that two week high in early trading in New York as Houthi strikes on Saudi infrastructure over the weekend added to concerns ​a​bout the stability and longevity of the current Middle Eastern oil supply recovery, and settled $1.89 higher at $93.74 a barrel as the successful Houthi attacks on Saudi Arabia overshadowed the Trump brokered deal to ease restrictions on Russian diesel exports…oil prices fell in Asian trading Tuesday, as traders debated whether additional Russian diesel supplies could ease ​current fuel shortages amid ongoing Middle East tensions, then extended their pullback from Monday’s gains before markets opened in the US, as Trump reiterated that the Iran war would end very soon, and claimed that talks between Washington and Tehran continued through intermediaries, but bounced off a low of $91.70 and never looked back as traders focused on the ​Houthi attacks on Saudi Arabia and on the Yemen Oil Company in Sanaa, and settled 40 cents higher at $94.14 per barrel as escalating political tensions in the Middle East lent support to prices, while concerns over weaker global demand weighed on the market​ after OPEC’s latest monthly report pointed to a subdued demand outlook….oil prices rose in early Asian trading on Wednesday, as traders assessed the risk of supply disruptions from renewed fighting between Yemen’s Houthi movement and Saudi Arabia, alongside expectations of increased Russian diesel exports, then climbed further on global markets after two vessels were struck in the Strait of Hormuz and Iranian officials told Reuters they were deploying new tactics to target ships, but were mixed Wednesday morning in New York as traders assessed the latest escalation in hostilities in the Middle East and an International Energy Agency projection warning of a prolonged diesel shortage, then rallied to settle 95 cents higher at $95.09 a barrel after Houthi forces launched a strike on Saudi Aramco’s administrative headquarters in Dhahran, and Iranian officials announced a transition to offensive naval tactics targeting commercial vessels aimed at keeping oil prices elevated…oil prices declined by around 2% during Asian trading on Thursday following reports that the US was considering measures to relax restrictions on tankers associated with Russia’s so-called “shadow fleet”, but then climbed nearly 3% in early US trading after the EIA unexpectedly ​reported a steep decline in ​US crude oil inventories during the previous week, and settled $2.88 higher at $97.97 a barrel on the larger than expected draw from US crude stocks​, and on the escalating conflict between Saudi Arabia and the Yemini Houthis….oil prices edged lower during Asian trading on Friday as uncertainty over Middle East supplies persisted amid the ongoing conflict, and were still down slightly in early US trading amid growing supply risks in Russia and the Middle East, but rallied to settle $3.44 higher at $101.41 a barrel on the sinking of a container ship in the Strait of Hormuz and on reports of potential preemptive strikes and rumors of attacks targeting Saudi Arabian energy networks, leaving oil prices up 10.4% for the week, the largest weekly jump since mid-July..

on the other hand, natural gas prices finished lower for the second time in three weeks on mild weather forecasts for the next two weeks and also for the ​c​oming winter…after rising 6.1% to $3.220 per mmBTU last week after Hurricane Isaias idled production but left LNG exports unscathed, the price of the benchmark natural gas contract for November delivery gas fell 5.3 cents to $3.167 per mmBTU in light holiday trading on Monday, driven by updated weather forecasts predicting milder temperatures across the U.S. and lower heating demand than previously expected, but traded gradually higher throughout the Tuesday session as traders returned from a long weekend to digest the impact of Hurricane Isaias, and settled 11.6 cents higher at $3.283 per mmBTU, fueled by tight supply, recovering LNG feedgas and a brief northern cooldown in the forecast….​but November natural gas opened 4.9 cents lower on Wednesday, and trended lower from there, as traders weighed warmer temperatures in the Midwest against steady LNG exports, and settled 8.5 cents lower at $3.198 per mmBTU amid signs of recovering supply and sluggish weather-driven demand in the forecast….that front month gas price started Thursday 4.2 cents higher, and rose to $3.260 ahead of the weekly storage report, then peaked at an intraday high of $3.303 just after the report of a bullish injection hit the wire, but faded thereafter to settle 3.8 cents higher at $3.236 per mmBTU, holding onto modest gains on a bullish storage surprise, robust LNG feedgas​, and a major Appalachian pipeline outage…natural gas futures slumped to start Friday’s session, as traders digested a lean storage print, light production readings, an Appalachian pipeline outage, continued strong LNG volumes and mixed near-term weather forecasts, then tumbled through midday amid mild October weather expectations and weakening power demand, while a major Columbia Gas Transmission (TCO) pipeline restriction remained in effect in Appalachia, and settled 12.0 cents lower at $3.116 per mmBTU on bearish near-term weather patterns and forecasts pointing toward a mild winter, and thus finished down 3.2% for the week…

The EIA’s natural gas storage report for the week ending October 9th indicated that the amount of working natural gas held in underground storage rose by 67 billion cubic feet to 3,567 billion cubic feet by the end of the week, which left our natural gas supplies 143 billion cubic feet, or 3.9% below the 3,710 billion cubic feet of gas that were in storage on October 9th of last year, but 45 billion cubic feet, or 1.3% above the five-year average of 3,522 billion cubic feet of natural gas that had typically been in working storage as of the 9th of October over the most recent five years….the 67 billion cubic foot injection into natural gas storage for the cited week was less than the 75 billion cubic foot injection into storage that the market had been expecting ahead of the report, and it was less than the 80 billion cubic foot of gas that were injected into natural gas storage during the corresponding week of 2025, and also less than the average 90 billion cubic foot injection into natural gas storage that had been typical at the beginning of October over the past five years…

The Latest US Oil Supply and Disposition Data from the EIA

US oil data from the US Energy Information Administration for the week ending October 9th showed that after a sizeable decrease in our oil imports, a drop in production from US wells, and an increase in our oil refining, we had to pull oil out of our stored crude supplies for the twenty-second time in twenty-five weeks…. Our imports of crude oil fell by an average of 791,000 barrels per day to average 6,049,000 barrels per day, after rising by an average of 1,142,000 barrels per day during the prior week, while our exports of crude oil fell by an average of 195,000 barrels per day to average 4,570,000 barrels per day, which, when used to offset our imports, meant that the net of our trade of oil worked out to an import average of 1.479,000 barrels of oil per day during the week ending October 9th, an average of 596,000 fewer barrels per day than the net of our imports minus our exports during the prior week… At the same time, transfers to our oil supplies from Alaskan gas liquids, from natural gasoline, from condensate, and from unfinished oils were 95,000 barrels per day higher than the prior week at 542,000 barrels per day, while during the same week, production of crude from US wells was 300,000 barrels per day lower 13,679,000 barrels per day.  Hence, our daily supply of oil from the net of our international trade in oil, from transfers, and from domestic well production appears to have averaged a total of 15,700,000 barrels per day during the October 9th reporting week…

Meanwhile, US oil refineries reported they were processing an average of 16,615,000 barrels of crude per day during the week ending October 9th, an average of 135,000 more barrels per day than the amount of oil that our refineries reported they were processing during the prior week, while over the same period, the EIA’s surveys indicated that an average net of 1,222,000 barrels of oil per day were being pulled out of the supplies of oil stored in the US… So, based on that reported & estimated data, the crude oil figures provided by the EIA appear to indicate that our total working supply of oil from storage, from net imports, from transfers, and from oilfield production during the week ending October 9th averaged 30​7,000 more barrels per day than what our oil refineries reported they used during the week.  To account for the difference between the apparent supply of oil and the apparent disposition of it, the EIA just plugged a rounded [ -308,000 ] barrel per day figure onto line 16 of the weekly U.S. Petroleum Balance Sheet, in order to make the reported data for the supply of oil and for the consumption of it balance out, a fudge factor that they label in their footnotes as “unaccounted for crude oil”, thus indicating there must have been a error or omission of that amount in the week’s oil supply & demand figures that we have just transcribed…. Since 589,000 barrels per day of demand for oil could not be accounted for in the prior week’s EIA data, that means there was a 281,000 barrel per day difference between this week’s oil balance sheet error and the EIA’s crude oil balance sheet error from a week ago, and hence the changes to supply and demand from that week to this one that are indicated by this week’s report are somehow off by that much, and are therefore not very useful….However, since most oil traders react to the figures in these weekly EIA reports as if they were gospel, and since these weekly figures therefore often drive oil pricing and hence decisions to drill or complete oil wells, we’ll continue to report this data just as it’s published, and just as it’s watched & believed to be reasonably reliable by most everyone in the industry…(for more on how this weekly oil data is gathered, and the possible reasons for that “unaccounted for” oil supply, see this EIA explainer….also see this March 2023 twitter thread from an EIA administrator addressing these ongoing weekly errors, and what they had once hoped to do about it).

This week’s rounded 1,222,000 barrel per day average decrease in our overall crude oil inventories came as an average of 1,222,000 barrels per day were being pulled out of our commercial stocks of crude oil, while supplies in our Strategic Petroleum Reserve were unchanged for the first time in twenty-nine weeks…..but with commercial oil supplies down sharply this week, that left the Total of all US Oil Supplies at 698,560,000 barrels, down 19.8% from 870,774,000 barrels on April 17th, and the lowest since March 23rd, 1984….

Further details from the weekly Petroleum Data Overview (pdf) indicated that the 4 week average of our oil imports fell to 6,116,000 barrels per day last week, which was 0.9% more than the 6,064,000 barrel per day average that we were importing over the same four-week period last year, while the four week average of our exports fell to 4,047,000 barrels per day last week, which was 0.6% less than the 4,073,000 barrel per day average that we were exporting last year year at this time… This week’s crude oil production was reported to be 300,000 barrels per day lower at 13,679,000 barrels per day as the EIA’s estimate of the output from wells in the lower 48 states was 276,000 barrels per day lower at 13,214,000 barrels per day, while Alaska’s oil production was 24,000 barrels per day lower at 465,000 barrels per day…US crude oil production had reached a pre-pandemic high of 13,100,000 barrels per day during the week ending March 13th 2020, so this week’s reported oil production figure was 4.4% higher than that of our pre-pandemic production peak, and was also 41.0% above the pandemic low of 9,700,000 barrels per day that US oil production had fallen to during the third week of February of 2021.

US oil refineries were operating at 93.5% of their capacity while processing those 16,615,000 barrels of crude per day during the week ending October 9th, up from 92.7% the prior week, and the highest October utilization rate since 2003….the 16,615,000 barrels of oil per day that were refined that week were the most barrels refined in any October week on record, 9.8% more than the 15,130,000 barrels of crude that were being processed daily during the week ending October 10th of 2025, and 7.6% more than the 15,436 ,000 barrels that were being refined during the pre-pandemic week ending October 11th , 2019, when our refinery utilization rate was at 83.1%, which was well below the pre-pandemic normal utilization rate for this time of year, probably due to the historic flooding across southeast Texas in the wake of Tropical Storm Imelda of that year…

Even with the increase in the amount of oil that was being refined this week, gasoline output from our refineries was again lower, decreasing by 117,000 barrels per day to 9,232,000 barrels per day during the week ending October 9th, ​the lowest in 33 weeks, after our refineries’ gasoline output had decreased by 117,000 barrels per day during the prior week… This week’s gasoline production was 1.4% less than the 9,359,000 barrels of gasoline that were being produced daily over the week ending October 10th of last year, and 7.7% less than the gasoline production of 9,998,000 barrels per day seen during the prepandemic week ending October 11th, 2019….at the same time, our refineries’ production of distillate fuels (diesel fuel and heat oil) decreased by 101,000 barrels per day to 5,189,000 barrels per day, after our distillates output had increased by 287,000 barrels per day during the prior week.  Even after that production decrease, our distillates output was 13.0% more than the 4,592,000 barrels of distillates that were being produced daily during the week ending October 10th of 2025, and 10.7% more than the 4,688,000 barrels of distillates that were being produced daily during the pre-pandemic week ending October 11th, 2019….

Even with this week’s decrease in our gasoline production, our supplies of gasoline in storage at the end of the week rose for the ninth time in thirty-five weeks, increasing by 3,518,000 barrels to 204,744,000 barrels during the week ending October 9th, after our gasoline inventories had increased by 382,000 barrels to a twelve year low during the prior week.  Our gasoline supplies rose by more this week because the amount of gasoline supplied to US users fell by 361,000 barrels per day to a 32 week low of 8,408,000 barrels per day, and because our exports of gasoline fell by 39,000 barrels per day to a 33 week low of 792,000 barrels per day, while our imports of gasoline fell by 4,000 barrels per day to 508,000 barrels per day.. After fifty-six gasoline inventory withdrawals over the past eighty-six weeks, our gasoline supplies were 4.8% lower than last October 10th’s gasoline inventories of 218,826,000 barrels, and were about 4% below the five year average of our gasoline supplies for this time of year…

After this week’s decrease in distillates production, our supplies of distillates fell for the seventeenth time in thirty-five weeks, decreasing by 2,527,000 barrels to 102,611,000 barrels during the week ending October 9th, after our distillates supplies had decreased by 42,000 barrels during the prior week… Our distillates supplies fell by more this week because the amount of distillates supplied to US markets, an indicator of domestic demand, rose by 673,000 barrels per day to a 34 week high of 4,323,000 barrels per day, and even as our exports of distillates fell by 391,000 barrels per day to 1,373,000 barrels per day, while our imports of distillates rose by 27,000 barrels per day to 145,000 barrels per day… After 32 withdrawals from distillates inventories over the past 65 weeks, our distillates supplies at the end of the week were 12.3% below the 117,030,000 barrels of distillates that we had in storage on October 10th of 2025, and were about 12% below the five year average of our distillates inventories for this time of the year…

Finally, after the drop in our oil imports and the hurricane induced drop in our well production, our commercial supplies of crude oil in storage fell for the 17th time in twenty-six weeks, for the 28th time over the past year, and by the most since February 13th, decreasing by 8,557,000 barrels over the week, from 424,134,000 barrels on October 2nd to 415,577,000 barrels on October 9th….After this week’s decrease, our commercial crude oil inventories were about 3% below recent five-year average of commercial oil supplies for this time of year, while they were about 17% above the average of our available crude oil stocks as of the second weekend of October over the 5 years at the beginning of the past decade, with the difference between those comparisons arising because it wasn’t until early 2015 that our oil inventories had first topped 400 million barrels. After our commercial crude oil inventories had jumped to record highs during the Covid lockdowns in the Spring of 2020, then jumped again after February 2021’s winter storm Uri froze off US Gulf Coast refining, but then fell sharply due to increased exports to Europe following the onset of the Ukraine war, only to jump again following the Christmas 2022 refinery freeze-offs, changes in our commercial crude inventories had been less extreme up until the onset of the Iran war, when they were initially built up to a three year high by mid-April, before falling to the lowest in nearly eight years by late July…This week’s decrease was the largest in eight months, and as of October 9th our commercial crude inventories were 1.9% below the 423,785,000 barrels of oil we had in commercial storage on October 10th of 2025, and 1.2% less than the 420,550,000 barrels of oil that we had in storage on October 11th of 2024, and 1.0% less than the 419,748,000 barrels of oil we had left in commercial storage on October 13th of 2023…

With this week’s big drop in crude oil inventories, that also meant that the week ended with total US stocks of crude oil and petroleum products down by 13,384,000 barrels to 1,506,999,000 barrels, the lowest for that total supply figure since May 23, 2003…

This Week’s Rig Count

The US rig count was unchanged over the week ending October 16th, as the number of rigs targeting oil was down by three, while the count of rigs targeting natural gas was up by one and miscellaneous rigs were up by two…for a quick snapshot of this week’s rig count, we are again including below a screenshot of the rig count summary table from Baker Hughes…in the table below, the first column shows the active rig count as of October 16th, the second column shows the change in the number of working rigs between last week’s count (October 9th) and this week’s (October 16th) count, the third column shows last week’s October 9th active rig count, the 4th column shows the change between the number of rigs running on Friday and the number running on the Friday of the same week of a year ago, and the 5th column shows the number of rigs that were drilling at the end of that reporting period a year ago, which in this week’s case was Friday, the 17th of October, 2025…

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August’s trade deficit and wholesale inventories

The only major agency reports released this week were the August report on our International Trade from the Commerce Dept, and the August report on Wholesale Trade, Sales and Inventories from the Census Bureau…

Major privately issued reports released during the week included the September Services Report On Business from the Institute for Supply Management (ISM), which reported that their Services PMI fell to 54.9% in September, down from 55.4% in August, which would indicate that a smaller plurality of service sector purchasing managers continued to report improving metrics for the key facets of their business in September, and the Mortgage Monitor for October, which now comes from the Mortgage Technology unit of ICE, and which indicated that 3.53% of all mortgages were delinquent in August, up from the 3.39% of mortgages that were delinquent in July, and up from the 3.43% delinquency rate of August 2025, and that 0.54% of all mortgages were in the foreclosure process in August, up 0.66% from the number of mortgages in foreclosure in July, and up from the 0.38% foreclosure rate of August a year ago….the full Mortgage Monitor for October (pdf), which covers August data, is a comprehensive 23 pages of tables and graphics, with explanatory text…

Trade Deficit Rose 13.7% in August after July’s 30.4% Jump, Implying a 3.14% Hit to Q3 GDP

Our trade deficit rose by 13.7% in August even as the value of our exports increased because the value of our imports increased by nearly four times as much….the Commerce Dept report on our international trade in goods and services for August indicated that our seasonally adjusted goods and services trade deficit rose by a rounded $12.7 billion to $105.6 in August, from a July deficit of $92.8 billion, which was revised from the $88.6 billion deficit that had been reported for July last month…after rounding, the value of our August exports rose by $4.5 billion to $315.2 billion on a $4.4 billion increase to $205.7 billion in our exports of goods, and an increase of less than $0.1 billion to $109.5 billion in our exports of services, while the value of our imports rose by $17.2 billion to $420.8 billion on a $17.2 billion increase to $342.2 billion in our imports of goods and an increase of less than $0.1 billion to $78.5 billion in our imports of services…prices for our exports were on average 0.6% higher in August, which means that part of the increase in our exports was due to higher prices and that our real exports likely only rose 0.8%, while import prices were 0.7% higher, similarly meaning that part of the increase in our imports was due to higher prices and that our real imports probably rose about 3.5%…

The news release for this month’s report gives us a brief synopsis of Exhibits 7 and 8 in the Full Release and Tables pdf for August, which details the major reasons for the increases in our exports and in our imports:

  Exports of goods on a Census basis increased $4.2 billion.

• Industrial supplies and materials increased $6.3 billion.
  • Nonmonetary gold increased $2.3 billion.
  • Crude oil increased $2.0 billion.
  • Fuel oil increased $1.2 billion.
• Capital goods increased $1.3 billion.
  • Semiconductors increased $1.0 billion.
  • Computers increased $0.9 billion.
  • Computer accessories increased $0.9 billion.
  • Civilian aircraft decreased $1.0 billion.
• Consumer goods decreased $2.2 billion.
  • Pharmaceutical preparations decreased $2.4 billion.

.Imports of goods on a Census basis increased $17.4 billion.

• Industrial supplies and materials increased $9.1 billion.
  • Crude oil increased $3.3 billion.
  • Nonmonetary gold increased $3.1 billion.
• Capital goods increased $6.2 billion.
  • Semiconductors increased $2.4 billion.
  • Other industrial machinery increased $1.3 billion.
  • Computer accessories decreased $1.6 billion.

  Net balance of payments adjustments decreased $0.2 billion.

That news release for this month’s report also summarizes Exhibit 19 in the full release, which gives us surplus and deficit details on our goods trade with selected countries:

The August figures show surpluses, in billions of dollars, with Netherlands ($7.7), South and Central America ($5.6), United Kingdom ($3.6), Hong Kong ($2.3), Brazil ($1.3), Belgium ($1.2), Australia ($0.6), and Saudi Arabia ($0.4). Deficits were recorded, in billions of dollars, with Mexico ($27.7), Vietnam ($24.0), Taiwan ($18.3), China ($16.4), European Union ($11.0), South Korea ($9.4), Canada ($7.1), India ($6.2), Germany ($6.2), Malaysia ($6.0), Italy ($4.3), Japan ($3.7), Ireland ($2.5), France ($1.4), Israel ($0.8), Switzerland ($0.4), and Singapore ($0.3).

• The deficit with Canada increased $4.1 billion to $7.1 billion in August. Exports increased $0.5 billion to $29.9 billion and imports increased $4.6 billion to $37.1 billion.
• The balance with Singapore shifted from a surplus of $1.9 billion in July to a deficit of $0.3 billion in August. Exports decreased $1.1 billion to $3.7 billion and imports increased $1.2 billion to $4.0 billion.
• The deficit with Ireland decreased $1.5 billion to $2.5 billion in August. Exports increased $0.1 billion to $1.7 billion and imports decreased $1.4 billion to $4.2 billion.

To gauge the impact of July and August goods trade on 3rd quarter GDP growth figures, we use exhibit 10 in the full pdf for this report, which gives us monthly goods trade figures by end use category and in total, already adjusted in chained 2017 dollars, the same inflation adjustment used by the BEA to compute the impact of foreign trade on GDP, except that the figures are not annualized here….from that table, we can compute that the 2nd quarter’s real exports of goods averaged 157,830.7 million monthly in 2017 dollars, while the similarly inflation adjusted July and August goods export figures were at 151,012 million and 152,961 million respectively, in that same 2017 dollar quantity index representation…computing the annual rate of change between the second and third quarter inflation adjusted averages, we find that the 3rd quarter’s real exports of goods are running at a 14.01% annual rate below those of the 2nd quarter, or at a pace that would subtract about 0.98 percentage points from 3rd quarter GDP if it were continued through September….in a similar manner, we find that our 2nd quarter real imports of goods averaged 250,698.3 million monthly in chained 2017 dollars, while inflation adjusted July and August imports were at 256,992 million and 267,650 million in 2017 dollars respectively…that would mean that so far in the 3rd quarter, our real imports have risen at a 19.87% annual rate from those of the 2nd quarter…since imports subtract from GDP because they represent the portion of consumption or investment that occurred during the quarter that was not produced domestically, their increase at a 19.87% rate would subtract about 2.16 percentage points from 3rd quarter GDP…..hence, if our real trade in goods remains at the same levels as in July and August throughout September, our deteriorating  balance of trade in goods over that of the 2nd quarter would subtract about 3.14 percentage points from the growth rate of 3rd quarter GDP….

Note that we have not computed the impact of the usually less volatile change in services here, because the BEA does not provide inflation adjusted data on those, and we don’t have a straightforward way to adjust the various services for all their price changes, but that our total exports of  services rose by less than $0.1 billion in August, whereas our imports of services also grew by less than $0.1 billion, which would the suggest that the change in August’s services side of the trade ledger would have a negligible impact on 3rd quarter GDP…

Wholesale Sales Rose 1.8% in August, Wholesale Inventories Rose 0.5%

The August report on Wholesale Trade, Sales and Inventories (pdf) from the Census Bureau estimated that the seasonally adjusted value of wholesale sales was at $817.5 billion, up 1.8 percent (±0.2 percent) from the July’s revised sales, and up 1up 15.6 percent (±0.7 percent) from the wholesale sales of August 2025… the July preliminary sales estimate was revised to $803.2 billion from the $801.3 billion in wholesale sales reported last month, which revised the June to July change from the preliminary estimate of up 0.8 percent (±0.4 percent) to up 1.0 percent (±0.4 percent)….as an intermediate activity, wholesale sales are not included in GDP except insofar as they are a trade service, since the traded goods themselves do not represent an increase in the output of the goods produced or finally sold….

On the other hand, the monthly change in private inventories is a major factor in GDP, as additional goods on the shelf represent goods that were produced but not sold, and this August report estimated that wholesale inventories were valued at a seasonally adjusted $964.2 billion at month end, up 0.5 percent (±0.2 percent) from the revised July level, and 0.6 percent (±0.7 percent)* higher than in August a year ago…July’s inventory value was revised from the $958.9 billion reported a month ago to $959.8 billion, which left the July inventory increase unchanged at up 0.2 percent (+/-0.2%)*…

August wholesale inventories would be adjusted for inflation with the appropriate sub-indices of the August producer price index, which showed that aggregate prices for finished goods were on average 1.1% higher, that prices for intermediate processed goods were 1.8% higher, and that prices for unprocessed goods were 1.1% higher….since the majority of wholesale inventories other than commodities are finished goods, those producer price changes suggest a real decrease of more than 0.6% in August inventories …however, since the key source data and assumptions (xls) for the second estimate of 2nd quarter GDP indicated that real wholesale inventories were down sharply in the 2nd quarter, accounting for about a third the quarter’s inventory decrease, that this report appears to indicate just a modest real decrease would therefore mean that the ultimate difference between the 3rd quarter decrease and the larger second quarter decrease would be added to the growth rate of 3rd quarter GDP…

(the above is the synopsis that accompanied my regular sunday morning news links emailing, which in turn was mostlyselected from my weekly blog poston theglobal glass onion…if you’d be interested in receiving my weekly emailing of selected links, most of which are chosen from the aforementioned GGO posts,contact me…)  

US oil output at a record high; US oil supplies at 42½ year low; refinery utilization at the highest October rate since 2003

record production of crude from US wells; Strategic Petroleum Reserve is the lowest since it was initially being filled in mid-October 1982, leaving the total of all US oil supplies, including the SPR, at the lowest level since March 30th, 1984; US refinery utilization at the highest October rate since 2003, refining the most barrels in any October week since 2019

US oil prices finished higher for the first time in three weeks on increased attacks on oil tankers in the Strait of Hormuz and as the first Gulf hurricane of the year forced shut a quarter of U.S. offshore oil production…after falling 1.4% to $91.11 per barrel last week as shipments of oil thru the Strait of Hormuz increased and Saudi Arabia resumed Red Sea oil exports after repairing its damaged East-West pipeline, the contract price for the benchmark US light sweet crude for November delivery edged lower during Asian trading on Monday, as rising Middle East crude exports and and a release of oil stocks by the Group of Seven ‌nations boosted supplies, offsetting concerns about further damage to Gulf oil infrastructure amid the US-Israeli war on Iran, and was down about 1% during morning trading in London, amid rising Middle East exports and the decision by the G7 countries to release fuel from strategic reserves, but steadied as trading began in New York as the market weighed signs of Middle Eastern supply recovery and the announcement of a large-scale release from emergency reserves against a flare-up in fighting in Yemen and continued attacks on tankers in the Strait of Hormuz, before resuming its slide to settle $1.68 lower at $89.43 a barrel after crude exports from the Middle East increased and the Group of Seven nations pledged to boost supplies, even as selling was limited by ‌ongoing disruption linked to the US war with Iran….oil futures traded higher on Tuesday morning in Asia following reports that the Houthis had attacked several sites in Saudi Arabia, but were down nearly 2% by the time trading wrapped up in Europe, as supply concerns eased due to increased Middle Eastern crude exports, and due to the agreement by the Group of Seven countries to release emergency diesel and crude stockpiles, but bounced off their low during US trading and retraced the earlier losses ahead of the close, as the continuing geopolitical risk limited the market’s losses, and settled one cent higher at $89.44 a barrel as the market weighed increases in Middle Eastern crude exports and a planned ‌Group of Seven release of emergency diesel and crude stockpiles against supply concerns related to attacks by the Iran-backed Houthis in Yemen….oil prices rose during Asian trading on Wednesday as the market weighed supply constraints from a storm heading for US oil-producing regions, and as attacks by Yemen’s Houthis on Saudi targets raised disruption risks, offsetting increased increased West Asian crude supplies, but fell during morning US trading despite an EIA report that the crude draw for last week was even bigger than what API reported, and far worse than the inventory increase that was expected, and settled $1.16 lower at $88.28 a barrel after the International Energy Agency’s member states agreed to prioritize the release of diesel stocks in an effort to address surging fuel prices…oil prices rose in early Asian trading on Thursday as concerns over supplies from the Middle East persisted amid increasing attacks on shipping traffic in the Gulf and the Strait of Hormuz, and were later up more than 4% across global markets after reports suggested that the White House had asked the Pentagon to develop options to strike Iran before the midterm elections, then jumped during Thursday morning in New York amid growing supply risks as Iran was stepping up attacks on tankers in the Strait of Hormuz, and the first Hurricane of the season forced shut a quarter of U.S. offshore oil production, and settled $3.21 higher at $91.49 a barrel on continuing concerns over supply from the Middle East amid an increase in attacks on shipping in the Strait of Hormuz….oil prices fell during Asian trading on Friday, as traders weighed President Trump’s pledge not to attack Iran before the U.S. midterm elections against persistent shipping risks in the Persian Gulf and extensive offshore production shut-ins in the Gulf of Mexico, and slid further Friday morning in New York after President Trump touted “productive discussions” with Iran, and the news that China was set to resume fuel exports following a one-week suspension, but recovered to settle 36 cents higher at $91.85 a barrel as Hurricane Isaias churned toward the northern Gulf of Mexico and ‌oil companies shut more than 70% of crude production in US waters, leaving oil prices 0.8% higher for the week….

meanwhile, natural gas prices finished higher for the third time in four weeks after Hurricane Isaias idled production but left LNG exports unscathed….after falling 5.7% to $3.035 per mmBTU last week on milder weather and a quick return to normal Appalachian pipeline flows after the prior week’s outage, the price of the benchmark natural gas contract for November delivery opened a penny higher on Monday, then traded near $3.060 into the afternoon, as steady LNG exports and healthy production kept the market in check, and settled 3.1 cents higher at $3.066 per mmBTU as slipping production outweighed mild October forecasts and sagging cash prices in the East…natural gas prices were little changed in morning trading Tuesday, as traders took note of weakening weather demand, LNG strength and mixed reads on supply, then moved higher through early afternoon trading as another production estimate kept supply concerns in focus, even as the weather outlook offered mixed support for demand, and settled 4.8 cents higher at $3.114 per mmBTU on tightening supply-demand balances, despite largely unsupportive two-week weather forecasts….natural gas futures surged higher in Wednesday morning action​, as traders digested light production estimates and the potential for Tropical Storm Isaias to wreak havoc and further curb supply during the week, then rose further through midday trading as cooler longer range forecasts, expectations for a below-normal storage injection and short covering lifted the front of the curve. and settled 8.9 cents higher at a two-week high of $3.203 per mmBTU on a drop in output due to recent pipeline problems​, and ​on worries that ​t​he Gulf of Mexico storm could cause further supply disruptions…natural gas prices moved higher early Thursday as traders took stock of Hurricane Isaias approaching the Gulf Coast, and expectations for a bullish government inventory report, but slipped in trading immediately after the report, which fell short of historical norms but exceeded market expectations, and settled 3.5 cents lower at $3.168 per mmBTU as the slightly bearish government storage surprise tempered bullish sentiment in the natural gas futures market, ending a four-day run of gains for the prompt month….natural gas futures pulled back early Friday as Hurricane Isaias neared the Gulf Coast, idling offshore production but looking to mostly steer clear of the Texas-Louisiana LNG export complex, but began to recover by midday from Thursday’s storage-driven sell-off amid declining domestic production and strengthening LNG feedgas, and settled 5.2 cents higher at $3.220 per mmBTU, as offshore operators shut in 1.26 billion cubic fet of production with a powerful hurricane poised to smack the northern Gulf Coast, leaving November natural gas prices 6.1% higher for the week…

The EIA’s natural gas storage report for the week ending October 2nd indicated that the amount of working natural gas held in underground storage rose by 85 billion cubic feet to 3,500 billion cubic feet by the end of the week, which left our natural gas supplies 130 billion cubic feet, or 3.6% below the 3,630 billion cubic feet of gas that were in storage on October 2nd of last year, but 68 billion cubic feet, or 2.0% above the five-year average of 3,336 billion cubic feet of natural gas that had typically been in working storage as of the 2nd of October over the most recent five years….the 85 billion cubic foot injection into natural gas storage for the cited week was above the 80 billion cubic foot injection into storage that the market had been expecting ahead of the report, and it was more than the  77 billion cubic foot of gas that were injected into natural gas storage during the corresponding week of 2025, but less than the average 96 billion cubic foot injection into natural gas storage that had been typical at the beginning of October over the past five years…

The Latest US Oil Supply and Disposition Data from the EIA

US oil data from the US Energy Information Administration for the week ending October 2nd showed that with a big jump in our oil exports, an increase in our oil refining, and an increase in demand for oil that the EIA could not account for, we had to pull oil out of our stored crude supplies for the the twenty-first time in twenty-four weeks, and for the 43rd time in seventy-one weeks, despite a big increase in our oil imports…. Our imports of crude oil rose by an average of 1,142,000 barrels per day to average 6,840,000 barrels per day, after falling by an average of 179,000 barrels per day during the prior week, while our exports of crude oil rose by an average of 1,195,000 barrels per day to average 4,765,000 barrels per day, which, when used to offset our imports, meant that the net of our trade of oil worked out to an import average of 2,075,000 barrels of oil per day during the week ending October 2nd, an average of 53,000 fewer barrels per day than the net of our imports minus our exports during the prior week… At the same time, transfers to our oil supplies from Alaskan gas liquids, from natural gasoline, from condensate, and from unfinished oils were 16,000 barrels per day higher than the prior week at 447,000 barrels per day, while during the same week, production of crude from US wells was 24,000 barrels per day higher at a record high of 13,979,000 barrels per day.  Hence, our daily supply of oil from the net of our international trade in oil, from transfers, and from domestic well production appears to have averaged a total of 16,501,000 barrels per day during the October 2nd reporting week…

Meanwhile, US oil refineries reported they were processing an average of 16,480,000 barrels of crude per day during the week ending October 2nd, an average of 223,000 more barrels per day than the amount of oil that our refineries reported they were processing during the prior week, while over the same period, the EIA’s surveys indicated that a​n average net of 567,000 barrels of oil per day were being pulled out of the supplies of oil stored in the US… So, based on that reported & estimated data, the crude oil figures provided by the EIA appear to indicate that our total working supply of oil from storage, from net imports, from transfers, and from oilfield production during the week ending October 2nd averaged a rounded 589,000 more barrels per day than what our oil refineries reported they used during the week.  To account for the difference between the apparent supply of oil and the apparent disposition of it, the EIA just plugged a [ -589,000 ] barrel per day figure onto line 16 of the weekly U.S. Petroleum Balance Sheet, in order to make the reported data for the supply of oil and for the consumption of it balance out, a fudge factor that they label in their footnotes as “unaccounted for crude oil”, thus indicating there must have been a error or omission of that amount in the week’s oil supply & demand figures that we have just transcribed…. Since 238,000 barrels per day of demand for oil could not be accounted for in the prior week’s EIA data, that means there was a 351,000 barrel per day difference between this week’s oil balance sheet error and the EIA’s crude oil balance sheet error from a week ago, and hence the changes to supply and demand from that week to this one that are indicated by this week’s report are somehow off by that much, and are therefore pretty useless….However, since most oil traders react to the figures in these weekly EIA reports as if they were gospel, and since these weekly figures therefore often drive oil pricing and hence decisions to drill or complete oil wells, we’ll continue to report this data just as it’s published, and just as it’s watched & believed to be reasonably reliable by most everyone in the industry…(for more on how this weekly oil data is gathered, and the possible reasons for that “unaccounted for” oil supply, see this EIA explainer….also see this March 2023 twitter thread from an EIA administrator addressing these ongoing weekly errors, and what they had once hoped to do about it).

This week’s rounded 567,000 barrel per day average decrease in our overall crude oil inventories came as an average of 455,000 barrels per day were being pulled out of our commercial stocks of crude oil, while 112,000 barrels per day were being pulled out of our Strategic Petroleum Reserve, the twenty-eighth consecutive Iran war related withdrawal from the SPR, which left the SPR level at 282,983,000 barrels, the lowest since it was initially being filled in mid-October 1982……..with both commercial oil and the SPR both down sharply this week, that left the Total of all US Oil Supplies at 707,117,000 barrels, down 18.8% from 870,774,000 barrels on April 17th, and the lowest since March 30th, 1984….

Further details from the weekly Petroleum Data Overview (pdf) indicated that the 4 week average of our oil imports rose to 6,368,000 barrels per day last week, which was 4.3% more than the 6,106,000 barrel per day average that we were importing over the same four-week period last year, while the four week average of our exports rose to 4,112,000 barrels per day last week, which was 3.8% less than the 4,276,000 barrel per day average that we were exporting last year year at this time… This week’s crude oil production was reported to be 16,000 barrels per day higher at a record high of 13,979,000 barrels per day as the EIA’s estimate of the output from wells in the lower 48 states was 3,000 barrels per day higher at 13,487,000 barrels per day, while Alaska’s oil production was 21,000 barrels per day higher at 489,000 barrels per day…US crude oil production had reached a pre-pandemic high of 13,100,000 barrels per day during the week ending March 13th 2020, so this week’s reported oil production figure was 6.7% higher than that of our pre-pandemic production peak, and was also 44.1% above the pandemic low of 9,700,000 barrels per day that US oil production had fallen to during the third week of February of 2021.

US oil refineries were operating at 92.7% of their capacity while processing those 16,480,000 barrels of crude per day during the week ending October 2nd, up from 92.5% the prior week, and the highest October utilization rate since 2003….the 16,480,000 barrels of oil per day that were refined that week were ​the most barrels refined in any October week since 2019, 1.1% more than the 16,297,000 barrels of crude that were being processed daily during the week ending October 3rd of 2025, and 5.3% more than the 15,656,000 barrels that were being refined during the pre-pandemic week ending October 4th, 2019, when our refinery utilization rate was at 85.7%, which was well below the pre-pandemic normal utilization rate for this time of year, probably due to the historic flooding across southeast Texas in the wake of Tropical Storm Imelda of that year…

Even with the increase in the amount of oil that was being refined this week, gasoline output from our refineries was still lower, decreasing by 117,000 barrels per day to 9,349,000 barrels per day during the week ending October 2nd, after our refineries’ gasoline output had decreased by 124,000 barrels per day during the prior week… This week’s gasoline production was 4.1% less than the 9,753,000 barrels of gasoline that were being produced daily over the week ending October 3rd of last year, and 7.1% less than the gasoline production of 10,066,000 barrels per day seen during the prepandemic week ending October 4th, 2019….on the other hand, our refineries’ production of distillate fuels (diesel fuel and heat oil) increased by 287,000 barrels per day to 5,290,000 barrels per day, after our distillates output had decreased by 156,000 barrels per day during the prior week.  After that production increase, our distillates output was 2.3% more than the 5,169,000 barrels of distillates that were being produced daily during the week ending October 3rd of 2025, and 9.4% more than the 4,835,000 barrels of distillates that were being produced daily during the pre-pandemic week ending October 4th, 2019….

Even with this week’s decrease in our gasoline production, our supplies of gasoline in storage at the end of the week rose for the eighth time in thirty-four weeks, increasing by 382,000 barrels to 204,744,000 barrels during the week ending October 2nd, after our gasoline inventories had decreased by 1,684,000 barrels to a twelve year low during the prior week.  Our gasoline supplies rose this week even though the amount of gasoline supplied to US users rose by 80,000 barrels per day to 8,769,000  barrels per day, because our exports of gasoline fell by 101,000 barrels per day to 831,000 barrels per day, and because our imports of gasoline rose by 12,000 barrels per day to 512,000 barrels per day.. After fifty-six gasoline inventory withdrawals over the past eighty-five weeks, our gasoline supplies were 6.5% lower than last October 3rd’s gasoline inventories of 219,093,000 barrels, and about 6% below the five year average of our gasoline supplies for this time of year…

Even after this week’s increase in distillates production, our supplies of distillates fell for the sixteenth time in thirty-four weeks, decreasing by 42,000 barrels to 105,138,000 barrels during the week ending October 2nd, after our distillates supplies had decreased by 2,251,000 barrels during the prior week… Our distillates supplies fell by less this week because the amount of distillates supplied to US markets, an indicator of domestic demand, fell by 298,000 barrels per day to 3,650,000 barrels per day, even as our exports of distillates rose by 235,000 barrels per day to 1,764,000 barrels per day, while our imports of distillates fell by 35,000 barrels per day to 118,000 barrels per day… After 31 withdrawals from distillates inventories over the past 64 weeks, our distillates supplies at the end of the week were 15.7% below the 124,665,000 barrels of distillates that we had in storage on October 3rd of 2025, and were about 12% below the five year average of our distillates inventories for this time of the year…

Finally, after the big jump in our oil exports, our commercial supplies of crude oil in storage fell for the 17th time in twenty-six weeks, and for the 27th time over the past year, decreasing by 3,186,000 barrels over the week, from 427,320,000 barrels on September 25th to 424,134,000 barrels on October 2nd, after our commercial crude supplies had increased by 922,000 barrels over the prior week….After this week’s decrease, our commercial crude oil inventories were still about 1% above recent five-year average of commercial oil supplies for this time of year, and they were about 19% above the average of our available crude oil stocks as of the first weekend of October over the 5 years at the beginning of the past decade, with the difference between those comparisons arising because it wasn’t until early 2015 that our oil inventories had first topped 400 million barrels. After our commercial crude oil inventories had jumped to record highs during the Covid lockdowns in the Spring of 2020, then jumped again after February 2021’s winter storm Uri froze off US Gulf Coast refining, but then fell sharply due to increased exports to Europe following the onset of the Ukraine war, only to jump again following the Christmas 2022 refinery freeze-offs, changes in our commercial crude inventories had been less extreme up until the onset of the Iran war, when they were initially built up to a three year high by mid-April, before falling to the lowest in nearly eight years by late July…This week’s decrease was the largest in six weeks, but as of October 2nd our commercial crude inventories were still 0.9% above the 420,261,000 barrels of oil we had in commercial storage on October 3rd of 2025, and 0.3% more than the 422,741 ,000 barrels of oil that we had in storage on September 27th of 2024, but fractionally less than the 424,239,000 barrels of oil we had left in commercial storage on October 6th of 2023…

This Week’s Rig Count

The US rig count increased by five over the week ending October 9th, as the number of rigs targeting oil was up by six, while the count of rigs targeting natural gas was down by one, and miscellaneous rigs were unchanged…for a quick snapshot of this week’s rig count, we are again including below a screenshot of the rig count summary table from Baker Hughes…in the table below, the first column shows the active rig count as of October 9th, the second column shows the change in the number of working rigs between last week’s count (October 2nd) and this week’s (October 9th) count, the third column shows last week’s October 2nd active rig count, the 4th column shows the change between the number of rigs running on Friday and the number running on the Friday of the same week of a year ago, and the 5th column shows the number of rigs that were drilling at the end of that reporting period a year ago, which in this week’s case was Friday, the 10th of October, 2025…

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