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.

---

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 1,379,000 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…

++

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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3rd estimate of Q2 GDP and annual revision; September’s jobs report, August’s income and outlays, construction spending, factory inventories, and JOLTS

The major economic releases of last week were the 3rd estimate of 2nd quarter GDP from the Bureau of Economic Analysis, which included an annual revision covering the prior five years, and the August report on Personal Income and Spending, also from the BEA, which includes two months of data on personal consumption expenditures and hence will account for more than 47% of 3rd quarter GDP, the Employment Situation Summary for September and the Job Openings and Labor Turnover Survey (JOLTS) for August, both from the Bureau of Labor Statistics, and the August report on Construction Spending (pdf) and the Full Report on Manufacturers’ Shipments, Inventories and Orders for August, both from the Census Bureau…in addition, this week also saw the last regional Fed manufacturing survey for September: the Dallas Fed Texas Manufacturing Outlook Survey, which covers Texas and adjacent western Louisiana and southeastern New Mexico, reported its general business activity edged down to +9.8 in September from +11.6 in August, indicating a smaller plurality of Texas businesses are experiencing improving metrics than in the prior month..

The week’s major privately issued reports included the ADP Employment Report for September, wherein the private payroll processor reported a 90,000 increase in private jobs in September; the September report on light vehicle sales from Omida, aka Wards Automotive, (the source of the BEA’s data) which estimated that vehicles sold at a 16.39 million annual rate in September, down from the 16.80 million annual rate in August, and down from the 16.72 million annual sales rate in September of last year, the Case-Shiller house price indexes for July from S&P Case-Shiller, who reported that their national home price index based on relative May, June and July home sales prices was 1.9% higher than their price index for the same three months of a year earlier, and the September Manufacturing Report On Business from the Institute for Supply Management, which reported that the manufacturing PMI (Purchasing Managers Index) slipped to 54.5% in September from 54.6% in August, indicating that a slightly smaller plurality of manufacturing purchasing managers continued to report improving metrics for the key facets of their business in September….

Employers Added 29,000 Jobs in September; Unemployment Rate, Employment Rate, and Participation Rate All Rose

The Employment Situation Summary for September reported a much smaller increase in payroll jobs than what had been expected, but that the employment rate and the labor force participation rose, and that the unemployment rate rose largely on upward rounding…estimates extrapolated from the establishment survey data projected that employers added a seasonally adjusted 29,000 jobs in September, after the previously estimated payroll job change for July was revised down from last month’s revised increase of 21,000 jobs to a decrease of 10,000, while the payroll jobs increase for August was revised from 162,000 down to 133,000, revisions which mean that this report thus shows 31,000 fewer payroll jobs than last month’s, in contrast to the 84,000 job increase forecast by the financial media….the unadjusted data, meanwhile, shows that there were actually 333,000 more payroll jobs in September, largely due to job increases relating to the beginning of the school year, and that the seasonal adjustment brought the headline jobs number down to a level where that normal September job increase was negated…

Seasonally adjusted job increases were spread through the goods producing and the service sectors, while modest job losses were seen in government, information, and financial activities…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 changed little in September (+29,000), following an average monthly gain of 45,000 over the prior 12 months. Employment in all major industries changed little over the month. (See table B-1.)
• Health care employment continued its upward trend in September (+17,000), but at a slower pace than the average monthly gain over the prior 12 months (+33,000). In September, employment continued to trend up in ambulatory health care services (+13,000) and in hospitals (+12,000), while nursing and residential care facilities lost jobs (-9,000).
• Employment in construction changed little in September (+11,000). The industry had added an average of 10,000 jobs per month over the prior 12 months. In September, employment in nonresidential specialty trade contractors continued to trend up (+12,000).
• Manufacturing employment was little changed in September (+9,000) but is up by 72,000 since a recent low in December 2025. Over the month, employment increased in plastics and rubber products manufacturing (+5,000) and in machinery manufacturing (+5,000).
• In September, financial activities employment was little changed (-7,000). Employment in financial activities is down by 129,000 since a recent peak in May 2025, with most of the job loss in insurance carriers and related activities (-90,000).
• Employment also showed little change over the month in other major industries, including mining, quarrying, and oil and gas extraction; wholesale trade; retail trade; transportation and warehousing; information; professional and business services; social assistance; leisure and hospitality; other services; and government..

The establishment survey also showed that average hourly pay for all employees rose by 5 cents an hour to $37.81 an hour, after it had increased by a revised 11 cents an hour in August; at the same time, the average hourly earnings of production and nonsupervisory employees increased by 7 cents to $32.60 an hour….employers also reported that the average workweek for all private payroll employees was unchanged at 34.4 hours in September, while hours for production and non-supervisory personnel was unchanged at 33.8 hours…at the same time, the manufacturing workweek was unchanged at 40.6 hours, while average factory overtime was unchanged at 3.0 hours…

Meanwhile, the seasonally adjusted extrapolation from the September household survey indicated that the number of those who would self-report being employed rose by an estimated 406,000 to 163,152,000, while the similarly estimated number of those who would qualify as being unemployed and looking for work rose by 78,000 to 7,109,000; and hence the civilian labor force increased by a rounded 485,000…since the working age population had grown by 139,000 over the same period, that meant the number of employment aged individuals who were not in the labor force fell by a rounded net of 346,000 to 105,292,000….the increase in the total labor force was enough to raise the labor force participation rate, from 61.6% in August to 61.8 in September, even as it was still down from 62.5% in September of last year…at the same time, the relatively larger increase in number employed was enough to boost the employment to population ratio, which we could think of as an employment rate, from 59.1% in August to 59.2% in September…meanwhile, with the modest increase in the number unemployed, the unemployment rate rose to 4.2% from 4.1%, which was a function or rounding more than anything, since the actual increase was from 4.14% to 4.17%….meanwhile, the number of the employed who reported they were forced to accept just part time work rose by 111,000 to 4,501,000 in September, but even so, the alternative measure of unemployment, U-6, which includes those “employed part time for economic reasons”, fell from 7.7% in August to 7.6% in September, the lowest U6 unemployment rate since January 2025, largely due to a decrease in discouraged workers and a 236,000 drop in “marginally attached” workers….

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 alongside of the press release to avoid the need to scroll up and down the page..

Third Estimate of 2nd Quarter GDP & Revisions From 2021 to Present

The Third Estimate of our 2nd Quarter GDP from the Bureau of Economic Analysis released on Thursday included an annual revision, which in this year’s case revised GDP data from the first quarter of 2021 through the first quarter of 2026, resulting in revisions to GDP, GDP by industry, gross domestic income, and related components…the updated estimates show that real GDP increased at an average annual rate of 3.4 percent over the five year period from 2020 to 2025, an upward revision from the 3.3% growth rate for that period that was previously published…for 2021, the change in real GDP was revised from 6.2 percent to 6.3 percent, reflecting a downward revision to imports (which are a subtraction in the calculation of GDP) and upward revisions to state and local government spending and to consumer spending….for 2022, the change in real GDP was revised down from 2.5 percent to 2.4 percent, reflecting downward revisions to consumer spending and to state and local government spending…meanwhile, the change in real GDP for 2023 was unrevised at 2.9 percent, as upward revisions to state and local government spending and to nonresidential fixed investment were offset by downward revisions to consumer spending on services and to private inventory investment….for 2024, the change in real GDP was revised from 2.8 percent to 3.0 percent, primarily reflecting upward revisions to nonresidential fixed investment and state and local government spending…lastly, for 2025, the change in real GDP was revised from 2.1 percent to 2.3 percent, reflecting upward revisions to nonresidential fixed investment in structures and state and local government spending, which were partly offset by an upward revision to imports…

The growth rate of the first quarter of 2026, which had last been reported at 2.1% when we reviewed the 3rd estimate of 1st quarter GDP three months ago, was revised to a 2.5% growth rate after this revision, as upward revisions to consumer consumption of goods and services and to exports more than offset downward revisions to fixed private investment, to inventories, and to government…More importantly, the price index for gross domestic purchases for the first quarter of 2026 was revised from 3.6% to 3.2%, reflecting a change in the methodology used to compute inflation, which thus underpinned the rounded 0.4 percentage point upward revision to real 1st quarter growth, suggesting there was little change in the nominal GDP components before the inflation adjustment was applied…checking that, we find that the current dollar GDP growth rate for the first quarter was actually statistically unchanged at 5.76%..

Revisions like those to the GDP readings of the past five years, and to the 3rd estimate of 1st quarter GDP, published as “final” just three months ago, should caution you to take even this 3rd estimate of 2nd quarter growth, which was released on Wednesday, with a grain of salt…the Third Estimate of our 2nd Quarter GDP from the Bureau of Economic Analysis indicated that our real output of goods and services grew at a 2.2% annual rate in the 2nd quarter, revised from the 1.5% growth rate that was reported in the second estimate last month, as growth of personal consumption expenditures for both goods and services, fixed private investment, inventories, net exports, the federal government, and state and local government were all upwardly revised….In current dollars, our second quarter GDP grew at a 8.49% annual rate, increasing from a revised $31,906.3 billion annual rate in the 1st quarter to a $32,563.0 billion annual rate in the 2nd quarter, with the headline 2.2% annualized rate of increase in real output arrived at after annualized GDP inflation adjustments averaging 6.1% were computed from the price changes of the GDP components and applied to their current dollar change…that so-called “GDP deflator” was revised down from the 6.4% reported a month ago, which thus  accounted for 0.3% of the upward revision to GDP…

As we review this month’s revisions to the 2nd quarter data, remember that this press release reports all quarter over quarter percentage changes at an annual rate, which means that they’re expressed as a change that’s compounded by 4 times from the change that actually occurred from one 3 month period to the next, and that the prefix “real” is used to indicate that each change has been adjusted for inflation using price changes now chained from 2017, and then that all percentage changes in this report are calculated from those 2017 dollar figures, which are then used as quantity indexes, rather 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 1.1.5. 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 1.5.2. 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…

Growth of real personal consumption expenditures (PCE), used to compute the largest component of GDP, was revised from the 3.4% growth rate reported last month to a growth rate of 3.8% in this 3rd estimate…that growth rate figure was arrived at by deflating the 8.97% growth rate in the dollar amount of consumer spending with the PCE price index, which indicated dollar weighted consumer inflation grew at a 5.0% annual rate in the 2nd quarter, which was revised from the 5.3% PCE inflation rate reported a month ago…..real (inflation adjusted) consumption of durable goods grew at a 7.4% annual rate, revised from the 5.7% growth rate reported in the 2nd estimate, and added 0.52 percentage points to GDP, as real consumption of motor vehicles and parts grew at an 11.3% rate and accounted for half of the growth in durable goods….at the same time, real consumption of nondurable goods by individuals grew at a 3.1% annual rate, revised from the 3.5% increase reported in the 2nd estimate, and added 0.41 percentage points to the 2nd quarter’s economic growth, as growth in consumption of food, clothing and footwear, and ‘other’ non-durables offset a modest decrease in real consumption of gasoline……meanwhile, real consumption of services grew at a 3.4% annual rate, revised from the 3.1% growth rate reported last month, and added 1.57 percentage points to the final GDP tally, as a 7.0% growth rate in real consumption of health care accounted for more than 50% of the growth in services…

Meanwhile, seasonally adjusted real gross private domestic investment grew at a 4.6% annual rate in the 2nd quarter, revised from the 2.7% growth estimate reported last month, as real private fixed investment grew at a 7.7% rate, revised up from the 7.0% growth rate reported in the second estimate, while the shrinkage of real inventories was somewhat smaller than previously estimated….the change in real investment in non-residential structures was revised from shrinking at a 1.8% rate to growing at an 0.1% rate, while real investment in equipment grew at a 13.4% rate, revised from the 13.6% growth rate previously reported…at the same time, the quarter’s investment in intellectual property products was revised from growth at a 8.8% rate to growth at a 9.2% rate, while the growth rate of residential investment was revised from 1.3% to 2.8% annually….after those revisions, the increase in investment in non-residential structures added 0.00 percentage points to the 2nd quarter’s growth rate, the increase in investment in equipment added 0.74 percentage points to the quarter’s growth, the increase in investment in intellectual property added 0.51 percentage points, while the increase in investment in residential structures added 0.10 percentage points to the 2nd quarter’s GDP growth…

At the same time, the second quarter’s change in real private inventories was revised from the previously reported $91.1 billion decrease in inflation adjusted dollars to indicate inventories shrunk at an inflation adjusted $63.4 billion rate…that came after inventories had shrunk at an inflation adjusted $31.9 billion in the 1st quarter, revised from the $28.1 billion 1st quarter inventory contraction previously reported, and hence the $31.5 billion negative change in real inventory growth from that of the 1st quarter subtracted 0.53 percentage points from the 2nd quarter’s growth rate, revised from the 0.72 percentage point subtraction shown in the second estimate, when the quarterly change in real inventory growth was shown at -$63.0 billion….however, since growth in inventories would indicate that more of the goods produced during the quarter would have been left in storage or “sitting on the shelf”, the $31.5 billion decrease in their growth conversely means real final sales of GDP were greater by that amount, and therefore the BEA found that real final sales of GDP grew at a 2.75% rate in the 2nd quarter, revised from the 2.2% rate of increase in real final sales originally shown in the second estimate…

The previously reported increase in real exports was somewhat greater after this estimate, while the previously reported increase in real imports was revised higher by less at the same time, and as a result, the negative impact of our imbalanced foreign trade on GDP was a bit smaller than in the second estimate….our real exports grew at a 5.0% rate, revised from the 4.5% growth rate reported in the second estimate, and since exports are added to GDP because they are part of our production that was not consumed or added to investment in our country and hence not included in other GDP components, that export growth added 0.56 percentage points to 2nd quarter GDP, revised from the  addition of 0.50 percentage points shown in the second estimate….meanwhile, the previously reported 12.5% increase in our real imports was revised to a 12.6% increase , and since imports subtract from GDP because they represent either consumption or investment added to another GDP component that shouldn’t have been because was not produced here, that import increase subtracted 1.66 percentage points from the 2nd quarter’s growth rate, revised from the 1.64 percentage point subtraction due t0 imports shown in the second estimate…..thus our deteriorating trade balance subtracted a net 1.10 percentage points from 2nd quarter GDP, revised from the rounded 1.14 percentage point subtraction that had been indicated in the second estimate…

Finally, there were also revisions to real government consumption and investment in this 3rd estimate, up for both the Federal government and for state and local government, as the entire government sector shrunk at an 0.1% rate, revised from the 1.0% contraction rate previously reported…real federal government consumption and investment was seen to have shrunk at a 2.4% annual rate, revised from the 4.2% contraction rate shown in the 2nd estimate, as real federal outlays for defense were revised to show growth at a 5.3% rate, revised from the 2.4% growth rate previously reported, and added 0.19 percentage points to 2nd quarter GDP, while all other federal consumption and investment shrunk at a 12.7% rate, revised from the 13.2% contraction rate previously reported, and subtracted 0.34 percentage points from 2nd quarter GDP….meanwhile, real state and local consumption and investment grew at a 1.2% rate over the quarter, which was revised from the 0.9% growth rate reported in the 2nd estimate, and added 0.13 percentage points to 2nd quarter GDP growth, as state and local investment shrunk at a 0.9% rate and subtracted 0.02 percentage points from the 0.15 addition from state and local consumption expenditures…note that 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, thus indicating there was an increase in the output of those goods or services…

August Personal Income up 0.2%, Spending Up 0.9%; PCE Prices Up 0.3%; Savings Rate at a 44 Month Low; Two Months PCE Would Add 199 Basis Points to Q3 GDP

Like the GDP report, the Income and Outlays report for August also went through an annual revision, with its revisions also from the first quarter of 2021 through the first quarter of 2026 for all of the metrics it reports, including personal consumption expenditures (PCE), the personal income and disposable personal income data, our savings and savings rate, and the PCE price index, the inflation gauge the Fed targets….A summary of those revisions and comparisons to previously published data is provided by an Information on 2026 Annual Updates page that accompanies this month’s report...since all the revisions made to personal consumption expenditures had already been incorporated into the GDP revisions that we have just reviewed, at this time we’ll only consider those revisions from recent months that are relevant to putting the August and potential 3rd quarter changes in perspective…

Also like the GDP report, all the dollar values reported by this release are seasonally adjusted and at an annual rate, ie, they tell us how much national income, spending, and savings would change over a year if August’s adjusted income and spending were extrapolated over an entire year…however, the percentage changes are computed monthly, from one month’s 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 July to August…..as they now try to explain in the opening line of the news release for this report, “Personal income increased $66.6 billion (0.2 percent at a monthly rate) in August“, which means that the annualized figure for seasonally adjusted personal income in August, $27,626.9 billion, was $66.6 billion, or more than 0.2% greater than the annualized personal income figure of $27,560.3 billion for July; the actual, unadjusted change in personal income from July to August, which would be on the order of one-twelfth of that size, is not given…similarly, annualized disposable personal income, which is income after taxes, rose by almost 0.3%, from an annual rate of $24,154.6 billion in July to an annual rate of $24,223.2 billion in August….the monthly contributors to the annualized $66.6 billion increase in personal income, which can be can be viewed in Table 2.6. of the National Income and Product Accounts, are therefore also annualized…in August, the major reasons for the $66.6 billion annual rate of increase in personal income were an annualized $36.6 billion increase in wages and salaries, and an annualized $22.9 billion increase in government social benefits to person, led by increases in Social security and Medicare benefits, and an $5.8 billion annualized increase in proprietors’ income, of which farmers saw a $3.7 billion annualized increase….

For personal consumption expenditures (PCE), BEA reports that they increased at a $190.8 billion annual rate, or by almost 0.9 percent, as the annual rate of PCE rose from $22,117.7 billion in July to $22,308.5 billion in August; that was after the July PCE figure was revised down from the originally reported $22,250.4 billion to $22,117.7 billion annually, while prior months were revised as well, revisions which were already included in the concurrent 3rd estimate of 2nd quarter GDP…..total personal outlays for August, which includes interest payments and personal transfer payments in addition to PCE, rose by an annualized $190.7 billion to $23,232.9 billion annually, which left total personal savings, which is disposable personal income less total outlays, at a $990.2 billion annual rate in August, down from the revised $1,112.4 billion annualized personal savings in July… as a result, the personal saving rate, which is personal savings as a percentage of disposable personal income, fell from 4.6% in July to 4.1% in August, the lowest personal savings rate since November 2022…

Before personal consumption expenditures can be used in the GDP computation, they must first be adjusted for inflation to give us the real change in consumption, and hence the real change in goods and services that were produced for that consumption….the BEA does that by computing a price index for personal consumption expenditures, which is a chained price index based on 2017 prices = 100, and which is included in NIPA Table 2.8.4 for this report…….that index rose from 131.172 in July to 131.579 in August, a month over month inflation rate that’s statistically 0.3102796%, which BEA reports as a 0.3% increase, following the rounded 0.1% increase in the PCE price index they reported for July…applying that August inflation adjustment to the nominal change in August spending left real PCE up by 0.550669%, or by a rounded 0.6% in August, after a real PCE increase of 0.1% in July …note that when those price indexes are applied to a given month’s annualized PCE in current dollars, it yields that month’s annualized real PCE in chained 2017 dollars, which are the means that the BEA uses to compare one month’s or one quarter’s real goods and services produced to another….the BEA’s result for that is shown in NIPA Table 2.8.6, where we see that August’s chained dollar personal consumption total works out to 16,955.3 billion annually, 0.550334% more than July’s 16,862.5     billion, a difference in real PCE that the BEA reports as +0.6%…

However, to estimate the impact of the change in real PCE on the change in GDP, month over month changes such as that don’t help us much, since GDP is reported quarterly…thus we have to compare July and August’s real PCE to the the real PCE of the 3 months of the second quarter….while this report reports real PCE for each of those months separately, we can get their annualized average in NIPA Table 1.5.6 for the 2nd quarter GDP report, where we find that the annualized real PCE for the 2nd quarter was represented by 16,788.7 billion in chained 2017 dollars….then, by averaging the annualized chained 2017 dollar figures for July and August, 16,862.5 billion and 16,955.3 billion respectively, we get an equivalent annualized PCE for the two months of the 3rd quarter that we have data for so far….when we compare that average of 16908.9 billion to the 2nd quarter real PCE representation of of 16,788.7 billion, we find that 3rd quarter real PCE has grown at a 2.89% annual rate for the two months of the 3rd quarter that we have…{note the math we’ve used to get that annual growth rate: (((16,955.3 + 16,862.5) / 2) / 16,788.7 ) ^ 4 = 1.02894734 }…that’s a pace that would add 1.99 percentage points to the growth rate of the 3rd quarter, should there be no change in September’s real PCE from that July & August average…

Job Openings and Layoffs Fell in August, Hiring Rose, and Job Quitting was Little Changed

The Job Openings and Labor Turnover Survey (JOLTS) report for August from the Bureau of Labor Statistics estimated that seasonally adjusted job openings fell by 256,000, from 7,335,000 in July to 7,079,000 openings in August, after July job openings were revised 64,000 higher, from the 7,271,000 reported last month to 7,335,000 now….August jobs openings were still 2.3% higher than the 6,919,000 job openings reported for August a year ago, as the job opening ratio expressed as a percentage of the employed fell from 4.4% in July to 4.3% in August, but was still up from 4.2% in August a year ago…the largest percentage decrease in job openings was the 45,000 decrease to 50,000 job openings in real estate and rental and leasing, while job openings information sector increased by 45,000 to 123,000 (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 linked 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 their jobs, and ‘other separations’, which includes retirements and deaths….in August, seasonally adjusted new hires totaled 5,192,000, up by 46,000 from the revised 5,146,000 who were hired or rehired in July, as the hiring rate as a percentage of all employed rose from 3.2% in July to 3.3% in August, and was also up from the 3.2% hiring rate in August a year earlier (details of hiring by sector since March are in table 2)….meanwhile, total separations fell by 58,000, from 5,128,000 in July to 5,070,000 in August, while the separations rate as a percentage of the employed was unchanged at 3.2% in August, which was still down from the separations rate of 3.3% in August a year ago (see details in table 3)…subtracting the 5,070,000 total separations from the total hires of 5,192,000 would imply an increase of 122,000 jobs in August, a little less than the revised payroll job increase of 133,000 jobs in August reported by the September establishment survey later in the week, but still within the expected +/-110,000 margin of error in these incomplete survey extrapolations…..

Breaking down the seasonally adjusted job separations, the BLS finds that 3,066,000 of us voluntarily quit our jobs in August, down by 23,000 from the revised 3,089,000 who quit their jobs in July, while the quits rate, widely watched as an indicator of worker confidence, was unchanged at 1.9% of total employment, which was still down from the quits rate of 2.0% a year earlier (see details in table 4)….in addition to those who quit, 1,641,000 employees were either laid off, fired or otherwise discharged in August, down by 61,000 from the revised 1,702,000 who were discharged in July, while the discharges rate fell from 1.1% of all those who were employed during July to 1.0% of the employed in August, which was also also down from the 1.2% discharges rate in August of a year earlier….meanwhile, other separations, which includes retirements and deaths, were at 263,000 in August, up from 237,000 in July, for an ‘other separations rate’ of 0.2%, same as in July and as in August 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…

Construction Spending Rose 0.9% in August, with July Implies 94 Basis Point Hit to 3rd Quarter GDP

The August report on construction spending (pdf) from the Census Bureau estimated that our seasonally adjusted construction spending construction spending for the month was at an annual rate of $2,203.1 billion, which was 0.9 percent (±1.0 percent)* above the revised annualized estimate of $2,184.5 billion in construction spending in July, but was 4.1 percent (±1.6 percent) above the estimated annualized level of construction spending of August of last year….for the first eight months of this year, construction spending amounted to $1,428.5 billion, which was 7.6 percent (±1.2 percent) above the $1,327.0 billion spent over the same period in 2023…

July’s construction spending was originally reported at a $2,167.7 billion annual rate, so it has been revised almost 0.8% higher, to a $2,184.5 billion annual rate, while June’s construction spending was revised 0.9% higher, from the $2,167.7 billion annual rate reported last month to a $2,187.35 billion rate now…that annualized $19.6 billion upward revision to June spending would mean that 2nd quarter GDP was underestimated by about 0.13 percentage points, give or take, depending on inflation adjustments for the components revised…..however, the 2nd quarter’s GDP will not be revised to reflect that underestimation until the annual revision of next summer…

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 $1,655.3 billion, 1.1 percent (±0.5 percent) above the revised July estimate of $1,637.7 billion. Residential construction was at a seasonally adjusted annual rate of $882.3 billion in August, 1.1 percent (±1.3 percent)* above the revised July estimate of $872.7 billion. Nonresidential construction was at a seasonally adjusted annual rate of $773.0 billion in August, 1.0 percent (±0.5 percent) above the revised July estimate of $765.0 billion.
• Public Construction: In August, the estimated seasonally adjusted annual rate of public construction spending was $547.8 billion, 0.2 percent (±2.0 percent)* above the revised July estimate of $546.8 billion. Educational construction was at a seasonally adjusted annual rate of $113.1 billion, 0.1 percent (±1.5 percent)* above the revised July estimate of $112.9 billion. Highway construction was at a seasonally adjusted annual rate of $150.6 billion, 0.1 percent (±5.6 percent)* above the revised July estimate of $150.5 billion.

This construction spending report is used as source data for 3 subcomponents of GDP; investment in private non-residential structures, investment in residential structures, and government investment outlays, for both state and local and Federal governments…. however, gauging the impact of revised July and August construction spending as reported here on 3rd quarter GDP is difficult because all figures given in this report are in nominal dollars at an annual rate, while data used to compute the change in GDP must be adjusted for changes in price…accurately adjusting construction  spending for price changes is not easy either, because the National Income and Product Accounts Handbook, Chapter 6 (pdf), lists a multitude of BLS and privately published deflators that are used by the BEA for the various components of non-residential investment, such as the Engineering News Record construction cost index for utilities’ construction spending….so in lieu of trying to find and adjust for all of those obscure price indices, we’ve opted to just use the producer price index for final demand construction as an inexact shortcut to make the price adjustment needed in order to come up with a ballpark estimate.

That producer price index showed that aggregate construction costs were unchanged in August, after rising 2.2% in July, rising 0.1% in June and rising 0.1%  from April to May…on that basis, we can estimate that construction costs for August were roughly 2.2% more than those of June, roughly 2.3% more than those of May, and roughly 2.4% more than those of April, while obviously unchanged from those of July…we then use those percentages to inflate the lower cost spending figures for each of the 2nd quarter months, which, for comparison purposes, is arithmetically the same as adjusting higher cost July & August construction spending downward…annualized construction spending in millions of dollars for the second quarter months is shown at $2,187,350 for June, $2,168,396 for May, and $2,168,231 for April in this report, while it was at $2,184,474 million for July and $2,203,129 million for August….thus to compare July and August’s inflation adjusted construction spending to that of the second quarter, our formula becomes: ((2,203,129 + 2,184,474 * 1.000 ) / 2 ) / (( 2,187,350 * 1.022 + 2,168,396 * 1.023 + 2,168,231 * 1.024 ) / 3) = 0.98612455465, meaning real construction over July and August averaged 1.39% lower than that of the 2nd quarter….hence, that means that after crudely adjusting for inflation, we can estimate that real construction for the 3rd quarter fell at a 5.44% annual rate from that of the 2nd quarter….put another way, that’s a decrease at a $30,868 billion annual rate, which suggests that if September should show no improvement, the decrease in real construction would subtract a net of about 0.47 percentage points from 3rd quarter GDP across those components that it is source data for..

Factory Shipments unchanged in August, Factory Inventories Rose 0.5%

The August Full Report on Manufacturers’ Shipments, Inventories, & Orders (pdf) from the Census Bureau reported that the seasonally adjusted value of new orders for manufactured goods rose by $0.7 billion or 0.1 percent to $663.5 billion in August, following an increase of 0.8% to $662.8 billion in July, which was revised from the 0.9% increase to $663.6 billion in new goods orders for July reported 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 accurate as revised updates to the August advance report on durable goods that we reported on last week…on those revisions, the Census Bureau’s own summary, which precedes their detailed spreadsheet of the metrics included in this report, is quite complete, so we’ll just quote directly from that summary here:

• Summary: New orders for manufactured goods in August, up two consecutive months, increased $0.7 billion or 0.1 percent to $663.5 billion, the U.S. Census Bureau reported today. This followed a 0.8 percent July increase. Shipments, down following eight consecutive monthly increases, decreased less than $0.1 billion or virtually unchanged to $658.6 billion. This followed a 0.8 percent July increase. Unfilled orders, up twenty-five of the last twenty-six months, increased $9.9 billion or 0.6 percent to $1,609.6 billion. This followed a 0.6 percent July increase. The unfilled orders-to-shipments ratio was 6.87, up from 6.81 in July. Inventories, up eleven consecutive months, increased $5.1 billion or 0.5 percent to $972.4 billion. This followed a 0.4 percent July increase. The inventories-to-shipments ratio was 1.48, up from 1.47 in July.
• New Orders for manufactured durable goods in August, down following two consecutive monthly increases, decreased $0.2 billion or 0.1 percent to $338.5 billion, down from the previously published virtually unchanged decrease. This followed a 0.9 percent July increase. Transportation equipment, down three of the last four months, drove the decrease, $0.8 billion or 0.7 percent to $114.1 billion. New orders for manufactured nondurable goods increased $0.9 billion or 0.3 percent to $325.0 billion.
• Shipments of manufactured durable goods in August, down following eight consecutive monthly increases, decreased $0.9 billion or 0.3 percent to $333.6 billion, down from the previously published 0.2 percent decrease. This followed a 0.9 percent July increase. Transportation equipment, also down following eight consecutive monthly increases, drove the decrease, $2.0 billion or 1.8 percent to $109.4 billion. Shipments of manufactured nondurable goods, up eight of the last nine months, increased $0.9 billion or 0.3 percent to $325.0 billion. This followed a 0.7 percent July increase. Petroleum and coal products, up seven of the last eight months, drove the increase, $0.9 billion or 1.4 percent to $70.7 billion.
• Unfilled Orders for manufactured durable goods in August, up twenty-five of the last twenty-six months, increased $9.9 billion or 0.6 percent to $1,609.6 billion, unchanged from the previously published increase. This followed a 0.6 percent July increase. Transportation equipment, up twelve of the last thirteen months, led the increase, $4.7 billion or 0.5 percent to $1,009.9 billion.
• Inventories of manufactured durable goods in August, up eleven consecutive months, increased $3.2 billion or 0.5 percent to $608.3 billion, unchanged from the previously published increase. This followed a 0.5 percent July increase. Transportation equipment, up ten of the last eleven months, led the increase, $1.2 billion or 0.6 percent to $192.7 billion. Inventories of manufactured nondurable goods, up six of the last seven months, increased $1.8 billion or 0.5 percent to $364.0 billion. This followed a 0.3 percent July increase. Petroleum and coal products, up two consecutive months, led the increase, $1.2 billion or 2.5 percent to $49.0 billion. By stage of fabrication, August materials and supplies increased 0.6 percent in durable goods and 0.9 percent in nondurable goods. Work in process increased 0.8 percent in durable goods and 1.1 percent in nondurable goods. Finished goods increased 0.1 percent in durable goods and were virtually unchanged in nondurable goods

To gauge the effect of August factory inventories on 3rd quarter GDP, they must first be adjusted for changes in price with appropriate components of the producer price index…by stage of fabrication, the value of finished goods inventories was 0.1% higher at $330,046 million; the value of work in process inventories was 0.9% higher at $276,346 million, and the value of materials and supplies inventories was 0.7% higher at $365,990 million.…meanwhile, the producer price index for August indicated that 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….assuming average valuations will be similar for like inventories, we could thus estimate that August’s real finished goods inventories decreased by 1.0%, that real inventories of intermediate processed goods decreased by 0.9%, and that real raw material inventory inventories were about 0.4% lower…while on net it the appears that August’s real inventories were somewhat lower, they follow July’s factory inventory change, when real inventories were higher by somewhat more…since real NIPA factory inventories were down sharply in the 2nd quarter, accounting for about three-fourths of the quarter’s inventory decrease, that two months of factory inventory data appears to indicate a small real increase in July factory inventories would therefore mean that the difference between the 2nd quarter decrease and the July increase would be added to the 3rd quarter’s real growth in 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 production at a record high, SPR is lowest since October 1982; gasoline supplies are lowest since November 2014

US oil prices fell for a second week after rising six out of the prior seven, 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….after falling 3.8% to $92.41 a barrel last week on hopes that negotiations to end the war in Iran would proceed with Iran’s president in New York for a United Nations General Assembly meeting, the contract price for the benchmark US light sweet crude for October delivery jumped more than 2% during Asian trading on Monday after US President Trump rejected an Iranian peace proposal aimed at resolving the conflict and reopening the Strait of Hormuz, and was up $2.51 to trade near $106.83 a barrel as markets opened in the U.S., after Trump’s rejection of the Iranian peace proposal came amid reports he was considering new military strikes on the country, but pulled back from session highs later in the session after Saudi Arabia reportedly ramped up its critical East-West pipeline after repairs, and settled just 19 cents higher at $92.60 a barrel amid the stalemate in U.S.-Iran peace talks, while Trump said that U.S. negotiators were expected to engage in more talks later in the week…oil prices continued to rise in Asian trading Tuesday amid fading hopes for the reopening of the Strait of Hormuz and expectations that the US Federal Reserve would raise interest rates again next month, but softened Tuesday morning in New York as signs of higher Middle Eastern oil supply outweighed concerns over stalling U.S.-Iranian negotiations, and then tumbled to settle $3.22 lower at $89.38 a barrel after trade sources said that Saudi Arabia resumed oil loadings from its Red Sea port of Yanbu after restarting operations on the East-West Pipeline…oil prices rose during trading in Asia on Wednesday after US President Trump rejected reports that he was prepared to ease sanctions on Iran, and were still up during trading on the ICE Futures Europe exchange in London, then rose to a session high during morning trading in New York after the EIA reported that both gasoline and distillate inventories fell, leaving Midwest gasoline supplies at their lowest on record, and settled $1.04 higher at $90.42 a barrel amid the continuing stalemate in U.S.-Iran peace talks…oil prices rose around 2% during Asian trading on Thursday after China suspended exports of oil products to most destinations, raising concerns about tighter fuel supplies worldwide, but were mixed in a volatile morning session Thursday in New York as a tightening global fuels market outweighed resurging crude exports from the Middle East, and settled $2.45 higher at $92.87 a barrel on the Chinese export ban and on the news that the U.S. was sending a third aircraft carrier strike group and up to 10,000 additional troops to the Middle East… oil prices edged higher during Asian trading on Friday as China halted fuel exports, while the US weighed additional military deployments to the Middle East, raising concerns over a potential escalation in tensions with Iran and further disruption to regional energy supplies, but fell $2 during European trading after European leaders agreed on Friday to a request by US President Trump to release diesel from their reserves to lower prices and reduce the need to import fuel from America, and were down more than $3 Friday morning in New York after the Elysée Palace proposed a joint EU-wide release of crude oil and diesel from strategic reserves, and settled $1.76 or 1.9% lower at $91.11 per barrel after the Group of Seven nations announced the release of diesel and crude stocks to ease surging fuel prices, while Saudi Arabia planned an offensive against Iran-backed Houthi militants in Yemen, which left oil prices 1.4% lower for the week…

meanwhile, natural gas prices finished lower for the first time in three weeks on milder weather and a quick return to normal Appalachian pipeline flows after last week’s outage…after rising 9.8% to $3.196 per mmBTU last week on falling production from domestic wells, another smaller than normal injection of gas into storage, and a leak-related shutdown of the Mountaineer XPress pipeline in West Virginia, the price of the benchmark natural gas contract for October delivery opened 10.8 cents lower on its last day of trading on Monday, and trended lower into the afternoon after an early rally failed, as traders assessed lower demand and the October contract’s settlement, and expired 19.6 cents lower at $3.000 per mmBTU as restored Mountaineer XPress supplies and fading shoulder season demand weighed on the front of the curve. while the price of the benchmark natural gas contract for November delivery settled 11.9 cents lower at $3.106  per mmBTU….now the quoted front month, that benchmark natural gas contract for November opened 4.6 cents lower on Tuesday and trended lower thereafter, as mild forecasts kept the pressure on, and settled 9.5 cents lower at $3.011 per mmBTU after a volatile session, pulled down by mild early October weather forecasts and restored Appalachian pipeline flows…that November natural gas price started Wednesday 0.8 cents lower and dipped to an intraday low of $2.966 by 9:55AM, as traders monitored production levels amid largely comfortable fall temperatures, then rose into the afternoon to settle 1.5 cents higher at $3.026 per mmBTU, as traders weighed thinning production against weak shoulder season demand ahead of Thursday’s government inventory report…November natural gas opened 1.1  lower on Thursday and hovered near $3.005 ahead of the weekly report, then drifted lower into the afternoon amid bearish short-term weather forecasts after failing to react to the as-expected injection, and settled 5.9 cents lower at $2.967 per mmBTU, as an in-line storage report failed to counter pressure from mild autumn weather and soft seasonal demand….natural gas futures started Friday’s session trading gingerly, amid largely stagnant – and bearish – demand-side fundamentals, then probed higher during late morning trading on diverse regional weather patterns and possible supply constraints, and settled 6.8 cents higher at $3.035 per mmBTU as an unplanned outage on the 30-inch diameter Tetco pipeline in Kentucky and approaching cooler weather provided support against a still-loose fundamental backdrop….natural gas prices thus ended 5.0% lower for the week, while the benchmark natural gas contract for November delivery, which had ended the prior week at $3.225 per mmBTU, finished 5.9% lower….

The EIA’s natural gas storage report for the week ending September 25th indicated that the amount of working natural gas held in underground storage rose by 64 billion cubic feet to 3,415 billion cubic feet by the end of the week, which left our natural gas supplies 138 billion cubic feet, or 3.9% below the 3,553 billion cubic feet of gas that were in storage on September 25th of last year, but 79 billion cubic feet, or 2.4% above the five-year average of 3,336 billion cubic feet of natural gas that had typically been in working storage as of the 25th of September over the most recent five years….the 64 billion cubic foot injection into natural gas storage for the cited week was close to the 63 billion cubic foot injection into storage that the market had been expecting ahead of the report, while it was more than the 56 billion cubic foot of gas that were injected into natural gas storage during the corresponding week of 2025, but less than the average 80 billion cubic foot injection into natural gas storage that had been typical for the last week in September 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 September 25th showed that after a big seasonal drop in our oil refining more than offset an increase in our oil exports, we had surplus oil left to add to our stored crude supplies for the the third time in twenty-three weeks, and for the 28th time in seventy weeks, despite an increase in demand for oil that the EIA could not account for…. Our imports of crude oil fell by an average of 179,000 barrels per day to 5,698,000 barrels per day, after falling by an average of 1,181,000 barrels per day during the prior week, while our exports of crude oil rose by an average of 289,000 barrels per day to average 3,570,000 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 2,128,000 barrels of oil per day during the week ending September 25th, an average of 468,000 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 4,000 barrels per day higher than the prior week at 431,000 barrels per day, while during the same week, production of crude from US wells was 16,000 barrels per day higher at a record high of 13,965,000 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 16,514,000 barrels per day during the September 25th reporting week…

Meanwhile, US oil refineries reported they were processing an average of 16,257,000 barrels of crude per day during the week ending September 25th, an average of 554,000 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 a net of 20,000 barrels of oil per day were being added to 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 net imports, from transfers, and from oilfield production during the week ending September 25th averaged a rounded 238,000 more barrels per day than what was added to storage plus 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 [ -238,000 ] 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 215,000 barrels per day of oil supplies could not be accounted for in the prior week’s EIA data, that means there was a 453,000 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 20,000 barrel per day average increase in our overall crude oil inventories came as an average of 132,000 barrels per day were being added to our commercial stocks of crude oil, while 112,000 barrels per day were being pulled out of our Strategic Petroleum Reserve, the twenty-seventh consecutive Iran war related withdrawal from the SPR, which left the SPR level at 283,767,000 barrels, the lowest since it was initially being filled in October 1982….Further details from the weekly Petroleum Status Report (pdf) indicated that the 4 week average of our oil imports fell to 6,364,000 barrels per day last week, which was still 4.8% more than the 6,073,000 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 3,775,000 barrels per day last week, which was 7.1% less than the 4,064,000 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 13,965,000 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 13,484,000 barrels per day, while Alaska’s oil production was 13,000 barrels per day higher at 468,000 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 6.5% higher than that of our pre-pandemic production peak, and was also 43.9% 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 92.5% of their capacity while processing those 16,257,000 barrels of crude per day during the week ending September 25th, down from 94.0% the prior week, but still high for mid-September….the 16,257,000 barrels of oil per day that were refined that week were 0.6% more than the 16,168,000 barrels of crude that were being processed daily during the week ending September 26th of 2025, and 1.5% more than the 16,017,000 barrels that were being refined during the pre-pandemic week ending September 27th, 2019, when our refinery utilization rate was at 86.4%, which was a bit below the pre-pandemic normal utilization rate for this time of year…

With the decrease in the amount of oil that was being refined this week, gasoline output from our refineries was also lower, decreasing by 124,000 barrels per day to 9,466,000 barrels per day during the week ending September 25th, after our refineries’ gasoline output had decreased by 54,000 barrels per day during the prior week… This week’s gasoline production was 1.3% more than the 9,344,000 barrels of gasoline that were being produced daily over the week ending September 26th of last year, but 7.3% less than the gasoline production of 10,081,000 barrels per day seen during the prepandemic week ending September 27th, 2019….at the same time, our refineries’ production of distillate fuels (diesel fuel and heat oil) decreased by 156,000 barrels per day to 5,003,000 barrels per day, after our distillates output had decreased by 69,000 barrels per day during the prior week.  Even after those production decreases, our distillates output was 0.9% more than the 4,959,000 barrels of distillates that were being produced daily during the week ending September 26th of 2025, and 3.9% more than the 4,813,000 barrels of distillates that were being produced daily during the pre-pandemic week ending September 27th, 2019….

With this week’s decrease in our gasoline production, our supplies of gasoline in storage at the end of the week fell for the twenty-sixth time in thirty-three weeks, decreasing by 1,684,000 barrels to 204,362,000 barrels during the week ending September 25th, the lowest since November 7th 2014, after our gasoline inventories had decreased by 1,686,000 barrels during the prior week.  Our gasoline supplies fell again this week even though the amount of gasoline supplied to US users fell by 158,000 barrels per day to 8,689,000  barrels per day, because our exports of gasoline rose by 94,000 barrels per day to 838,000 barrels per day, while our imports of gasoline rose by 99,000 barrels per day to 500,000 barrels per day.. After fifty-six gasoline inventory withdrawals over the past eighty-four weeks, our gasoline supplies were 7.4% lower than last September 26th’s gasoline inventories of 220,694,000 barrels, and about 7% 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 fifteenth time in thirty-three weeks, decreasing by 2,251,000 barrels to 105,180,000 barrels during the week ending September 25th, after our distillates supplies had decreased by 428,000 barrels during the prior week… Our distillates supplies fell by more this week even as the amount of distillates supplied to US markets, an indicator of domestic demand, fell by 27,000 barrels per day to 3,948,000 barrels per day, because our exports of distillates rose by 198,000 barrels per day to 1,529,000 barrels per day, while our imports of distillates rose by 68,000 barrels per day to 153,000 barrels per day… After 30 withdrawals from distillates inventories over the past 63 weeks, our distillates supplies at the end of the week were 14.9% below the 123,577,000 barrels of distillates that we had in storage on September 26th of 2025, and were about 14% below the five year average of our distillates inventories for this time of the year…

Finally, after the seasonal slowdown in our oil refining, our commercial supplies of crude oil in storage rose for the 11th time in twenty-six weeks, and for the 27th time over the past year, increasing by 922,000 barrels over the week, from 426,398,000 barrels on September 18th to 427,320,000 barrels on September 25th, after our commercial crude supplies had increased by 2,969,000 barrels over the prior week….After this week’s increase, our commercial crude oil inventories were about 2% above recent five-year average of commercial oil supplies for this time of year, and they were about 20.1% above the average of our available crude oil stocks as of the fourth weekend of September 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 increase was the second following three decreases, and as of September 25th our commercial crude inventories were 2.6% above the 416,546,000 barrels of oil we had in commercial storage on September 26th of 2025, and were 2.5% more than the 416,931,000 barrels of oil that we had in storage on September 27th of 2024, and 3.2% more than the 414,063,000 barrels of oil we had left in commercial storage on September 29th of 2023…

This Week’s Rig Count

The US rig count fell by one over the week ending October 2nd, as the number of rigs targeting oil was up by one, but the count of rigs targeting natural gas was down by two, while 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 2nd, the second column shows the change in the number of working rigs between last week’s count (September 25th) and this week’s (October 2nd) count, the third column shows last week’s September 25th 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 3rd of October, 2025…

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August’s durable goods and new home sales

There were just two widely watched economic reports released this week: the August advance report on durable goods and the August report on new home sales, both from the Census bureau…meanwhile, the week also saw the release of the Chicago Fed National Activity Index (CFNAI) for August, a weighted composite index of 85 different economic metrics, which fell to to –0.04 in August from +0.08 in July, after the July index was revised up from –0.08 to +0.08; that left the more often cited 3 month moving average of the index at +0.01 in August, up from a revised –0.01 in July, with those figures for both months so close to zero that both would indicate that national economic activity has been near the historical trend over the summer months..

The week also saw the release of two more regional Fed manufacturing surveys for September: the Kansas City Fed manufacturing survey, covering western Missouri, Colorado, Kansas, Nebraska, Oklahoma, Wyoming and northern New Mexico, reported its broadest composite index rose to +14 in September, up from +10 in August and +9 in July, meaning a larger plurality of that region’s manufacturers reported improving business metrics this month than during the prior two, while 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 fell to −2 in September from +4 in August and from +5 in July, which means that a small plurality of that region’s manufacturers reported deteriorating business metrics during September, after a small plurality had reported improvement during the prior two months…

August Durable Goods: New Orders Fell < 0.1%, Shipments Fell 0.2%, Inventories Rose 0.5%

The Advance Report on Durable Goods Manufacturers’ Shipments, Inventories and Orders for August (pdf) from the Census Bureau reported that the value of the widely watched new orders for manufactured durable goods decreased by $0.1 billion to $338.6 billion, the first decrease in three months, following a 0.9% increase to $338.7 billion in July, which was revised from the 1.1% increase to $339.3 billion reported for July’s new durables orders a month ago….after an 8.5% jump in the value of April’s orders, new orders are now running 7.7% above those of a year ago, up a bit from the 7.6% year-to date increase we saw in this report last month…

As is usually the case, the volatile monthly change in the value of new orders for transportation equipment drove this month’s headline decrease, as the value of new transportation equipment orders fell $0.7 billion or 0.6 percent to $114.1 billion, on a 4.3% decrease to $18,825 million in new orders for commercial aircraft and a 0.6% decrease to $73,347 million in new orders for motor vehicles and parts….excluding new orders for transportation equipment, other new orders were up 0.3% in August, while new orders for nondefense capital goods excluding aircraft, a proxy for equipment investment, rose 1.6% to $87,629 million, after rising 0.6% in July…

Meanwhile, the seasonally adjusted value of August’s shipments of durable goods, which will be inputs into various components of 3rd quarter GDP after adjusting for changes in prices, fell for the first time in nine months, decreasing by $0.7 billion or 0.2 percent to $333.8 billion, after the value of July’s shipments was revised from $334.7 billion to $334.56 million, thus revising the previously reported 1.0% increase in July shipments to a 0.9% increase from June….a decrease of $2.0 billion or 1.8 percent to $109.5 billion in the value of shipments of transportation equipment led the August decrease, as the value of shipments of commercial aircraft fell 8.6% to $16,267 million, and the value of shipments of motor vehicles and parts fell 0.7% to $73,240 million…on the other hand, the value of shipments of durable goods other than transportation equipment rose 0.6% to $224,360 million, led by a 1.5% jump in shipments of computers and related products… As a result, the value of shipments of nondefense capital goods excluding aircraft rose 0.6% to $84,998 in August, after rising 1.4% in July, changes that will be reflected in 3rd quarter GDP equipment investment figures, after adjusting for changes in prices since the 2nd quarter ….

At the same time, the value of seasonally adjusted inventories of durable goods, also a major GDP contributor, rose for the eleventh  consecutive month, increasing by $3.0 billion or 0.5 percent to $608.1 billion, after the value of July’s inventories was revised from $604.4 billion to $605.054 billion, which was still a 0.5% increase from June…a $1.1 billion or 0.6 percent increase to $192.7 billion in the value of inventories of transportation equipment led the August inventory increase, while the value of inventories of other than transportation equipment rose 0.5% to $415.4 billion….

Finally, the value of unfilled orders for manufactured durable goods, which is probably a better measure of industry conditions than the widely watched but volatile new orders, rose for the twenty-fifth time in twenty-six months, increasing by $9.8 billion or 0.6 percent to $1,609.4 billion, after the value of July’s unfilled orders was revised from the $1,599.9 billion reported last month to $1,599.6 billion, which is still a 0.6% increase from June…a $4.7 billion or 0.5 percent increase to $1,009.8 billion in the value of unfilled orders for transportation equipment led the August increase, while unfilled orders other than those for transportation equipment were 0.9% higher at $599.6 billion…compared to a year earlier, the unfilled order book for durable goods is now 8.8% above the level of last August, as the value of unfilled orders for transportation equipment is 9.8% above its year ago level, on a 11.9% increase in the value of the backlog of orders for defense aircraft and a 9.9% increase in the value of the backlog of orders for civilian aircraft and parts…

August New Home Sales Highest in 8 Months; Average Sales Price Lowest in Two Years

The Census report on New Residential Sales for August (pdf) estimated that new single family homes were selling at a seasonally adjusted pace of 684,000 new homes a year, which was 6.4 percent (±19.5 percent)* above the revised July rate of 643,000 new home sales a year, but was 2.0 percent (±15.7 percent)* below the estimated annual rate that new homes were selling at in August of last year….the asterisks indicate that based on their small sampling, Census could not be certain whether August new home sales rose or fell from July, or even from those 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, these initial new home sales reports are not very reliable and often see significant revisions… with this report, sales new single family homes in July were revised from the annual rate of 678,000 reported last month down to a 643,000 annual rate, while home sales in June, initially reported at an annual rate of 628,000 and revised to a 678,000 a year rate last month, were revised to a 672,000 a year rate with this report, and while May’s annualized home sale rate, initially reported at a 580,000 rate and revised from a 618,000 to a 630,000 rate last month, were revised up to a 636,000 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 57,000 new single family homes sold in August, up from the estimated 53,000 new homes that sold in July but down from the 58,000 that sold in June….the raw figures from Census field agents further allowed for estimates that the median sales price of new houses sold in August was $393,700, up from the estimated median sales price of $392,200 in July, but down from the median sales price of $417,900 in August a year ago, and that the average August new home sales price was at a two  year low of $478,700, down from the $526,400 average sales price in July, and down from the average sales price of $525,100 average in August a year ago….a seasonally adjusted estimate of 483,000 new single family houses remained for sale at the end of August, which represents a 8.5 month supply at the August sales rate, down from the revised 9.0 month supply of unsold homes in July, which was originally reported as a 9.6 month supply…. 

(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…)

highest natural gas close in 33 weeks; distillates imports at 52 week low; US rig count at 27 month high; SPR near 44 year low

highest natural gas closing price since February 6th after force majeure on the leaking Mountaineer XPress pipeline in WV; US Strategic Petroleum Reserve at its lowest since October 1982; distillates imports at a 52 week low;  US rig count at a 27 month high

US oil prices fell for ​t​he second time in eight weeks on hopes that negotiations to end the war in Iran would proceed with Iran’s president in New York for a United Nations General Assembly meeting….after inching up 0.2% to $100.30 a barrel last week after drone damage to Saudi Arabia’s East-West pipeline led to a suspension of their exports through the Red Sea, the contract price for the benchmark US light sweet crude for October delivery fell to its lowest level in more than a week during Asian trading early on Monday, as traders hoped diplomatic efforts over the Iran war would gain momentum this week amid a United Nations meeting in New York, and ​w​as down 3.4% during early trading in New York, after Trump reportedly told a news channel that he would “probably” be open to a sit-down meeting with Iranian President Masoud Pezeshkian, and settled $4.52 or 4.5% lower at $95.78 a barrel as traders hoped for a breakthrough in peace talks this week during the United Nations meeting….that October oil contract price rose slightly on its last day of trading as markets opened in Asia on Tuesday, as traders watched for developments in possible US-Iran talks on the sidelines of the United Nations General Assembly meetings in New York, and was up by more than 1.1% as markets started trading in London, as traders continued assessing the situation in the Middle East and the prospects for its settlement. but turned sharply lower during early trade in New York as markets awaited hints at diplomacy from U.N. general assembly speeches by U.S. President Donald Trump and his Iranian counterpart Masoud Pezeshkian that could signal a reopening of the Strait of Hormuz to oil and other energy shipments, and expired $1.19 lower at $94.59 a barrel amid the prospects increased oil flow from the Middle East, after Iran signaled it could reopen the Strait of Hormuz and Saudi Arabia was set to resume its oil exports from its Red Sea port of Yanbu, while the price of the benchmark US oil contract for November delivery settled $1.85 lower at $90.52 a barrel…with markets now citing the price of that benchmark US light sweet crude for November delivery, prices fell across global markets on Wednesday after US President Trump said American and Iranian representatives had held “very good” and productive discussions on the sidelines of the United Nations General Assembly in New York, but reversed initial losses during early US trading amid persistent Middle East supply risks, as traders weighed the prospect of improved Saudi export flows and U.S.-Iran diplomacy against the potential for further disruptions, and were later up nearly 5% amid concerns that the Middle East conflict could widen, even after U.S. and Iranian officials held their first talks since June, as signals suggested little willingness to reach a ceasefire, and settled $1.64 higher at $92.16 a barrel as traders evaluated Iranian President Masoud Pezeshkian’s vow never to surrender, after US President Trump warned he could “annihilate” Iran….oil prices fell during early Asian trading on Thursday, as Iran said it remained open to diplomacy to end the war with the United States, but then jumped about 4% to a one-week high during US trading after Yemen’s Houthis fired missiles at Saudi Arabia and diplomatic talks between the US and Iran showed little sign of progress, and settled $2.45 higher at $94.61 a barrel as the Houthi missile attack on Saudi Arabia revived fears of supply disruptions, while reports of US-Iran talks on reopening the Strait of Hormuz subsequently tempered the gains…oil prices edged lower during Asian trading on Friday as markets weighed conflicting factors, including the possibility of a ceasefire between the United States and Iran and ongoing Houthi attacks on Saudi Arabia, then slid further Friday morning in New York on revived direct negotiations between the U.S. Iranian diplomats in New York for the first time since June, sparking market optimism about a deal that could reopen the Strait of Hormuz, and settled $2.20 lower at $92.41 a barrel after Iran’s foreign minister offered to reopen the Strait of Hormuz in seven days if the US meets his terms….oil prices thus finished 7.9% lower for the week, while the price of the benchmark US oil contract for November delivery, which had ended the prior week at $96.08 a barrel, finished this one 3.8% lower..

meanwhile, natural gas prices finished higher for the sixth time in seven weeks on falling production from domestic wells as another smaller than normal injection of gas into storage further reduced the surplus inventory….after rising 2.9% to $2.912 per mmBTU last week on an increase in LNG demand and on forecasts for warmer than normal forecasts through early October, the price of the benchmark natural gas contract for October delivery opened 6.1 cents lower on Monday, after losing ground in pre-market trading, as cooler temperatures took hold and scheduled LNG maintenance limited exports, then ​d​ropped again after a brief early rally to settle 7.6 cents lower at $2.836 per mmBTU amid healthy supply readings and forecasts for benign weather through the final stretch of September and into early October….the front-month natural gas contract opened 1.1 cents lower on Tuesday, but rose ​through the morning as production levels from US wells fell to nearly​ a two-month low, and settled 12.9 cents higher at $2.965 per mmBTU on bargain buying and the bullish natural gas market fundamentals of easing production and a shrinking storage inventory surplus…natural gas prices opened 7.4 cents higher on Wednesday and rose to an eleven-week intraday high of $3.042 ahead of 9:05 AM, then fell back to reach an intraday low of $2.959 at 10:15 AM, as traders struggled to find a balance between cooling weather, lower production, and short covering, then arced higher once again to settled 5.8 cents higher at $3.023 per mmBTU as short covering and colder overnight forecasts outweighed the weakest power burn since Labor Day….natural gas prices started 2.2 cents lower on Thursday and traded near $3.005 through the day’s opening hour, then spiked upwards as the historically bullish weekly storage report hit the wire and hit a 14-month intraday high of $3.317 at 1:45 PM, before closing 27.4 cents higher $3.297 per mmBTU, the biggest one-day gain since January, on a seasonally lean storage print, lighter production and hints of heating demand, and on a natural gas leak on the Mountaineer XPress pipeline in West Virginia…natural gas futures retreated early Friday from the three-month high of Thursday, as traders weighed how long a force majeure on the leaking Mountaineer XPress (MXP) pipeline could hold back Lower 48 production, and were down by 14.5 cents by midday, as the pipeline leak in the heart of the Appalachian natural gas patch exacerbated typical expiration week volatility, as nearly 1.8 million Dth/d of firm takeaway capacity was expected to remain offline through the weekend, and settled 10.1 cents lower at $3.196 per mmBTU, as traders took profits following a pronounced rally that sent prices to their highest levels since the peak of summer, leaving October natural gas prices up 9.8% on the week…

The EIA’s natural gas storage report for the week ending September 18th indicated that the amount of working natural gas held in underground storage rose by 53 billion cubic feet to 3,351 billion cubic feet by the end of the week, which left our natural gas supplies 146 billion cubic feet, or 4.2% below the 3,497 billion cubic feet of gas that were in storage on September 18th of last year, but 95 billion cubic feet, or 2.9% above the five-year average of 3,256 billion cubic feet of natural gas that had typically been in working storage as of the 18th of September over the most recent five years….the 53 billion cubic foot injection into natural gas storage for the cited week was a little less than the 56 billion cubic foot injection into storage that the market had been expecting ahead of the report, while it was considerably less than the 77 billion cubic foot of gas that were injected into natural gas storage during the corresponding week of 2025, and also less than the average 76 billion cubic foot injection into natural gas storage that had been typical for the ​t​hird week in September 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 September 18th showed that after a big drop in our oil exports and a big decrease in our oil refining, we had surplus oil left to add to our stored crude supplies for the ​j​ust the second time in twenty-two weeks, and for the 27th time in sixty-nine weeks, with a decrease in the domestic supply of oil the EIA could not account for also contributing…. Our imports of crude oil fell by an average of 1,181,000 barrels per day to 5,877,000 barrels per day, after rising by an average of 234,000 barrels per day during the prior week, while our exports of crude oil fell by an average of 1,550,000 barrels per day to average 3,281,000 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 2,596,000 barrels of oil per day during the week ending September 11th, an average of 369,000 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 lower than the prior week at 428,000 barrels per day, while during the same week, production of crude from US wells was 5,000 barrels per day lower at 13,939,000 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 16,963,000 barrels per day during the September 18th reporting week…

Meanwhile, US oil refineries reported they were processing an average of 16,811,000 barrels of crude per day during the week ending September 11th, an average of 519,000 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 a net of 366,000 barrels of oil per day were being added to 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 net imports, from transfers, and from oilfield production during the week ending September 18th averaged a rounded ​2​15,000 fewer barrels per day than what was added to storage plus 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 [ +215,000 ] 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 577,000 barrels per day of oil supplies could not be accounted for in the prior week’s EIA data, that means there was a 362,000 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 therefore aren’t 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 366,000 barrel per day average increase in our overall crude oil inventories came as an average of 424,000 barrels per day were added to our commercial stocks of crude oil, while 58,000 barrels per day were being pulled out of our Strategic Petroleum Reserve, the twenty-sixth consecutive Iran war related withdrawal from the SPR, which left the SPR level at 284,552,000 barrels, the lowest since it was initially being filled in October 1982….Further details from the weekly Petroleum Status Report (pdf) indicated that the 4 week average of our oil imports fell to 6,632,000 barrels per day last week, which was 5.3% more than the 6,300,000 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 4,003,000 barrels per day last week, which was 2.3% less than the 4,098,000 barrel per day average that we were exporting last year year at this time… This week’s crude oil production was reported to be 5,000 barrels per day lower at 13,939,000 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 13,484,000 barrels per day, while Alaska’s oil production was 8,000 barrels per day lower at 463,000 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 6.4% higher than that of our pre-pandemic production peak, and was also 43.7% 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 94.0% of their capacity while processing those 16,811,000 barrels of crude per day during the week ending September 18th, down from 96.8% the prior week, but still higher than normal for mid-September….the 16,811,000 barrels of oil per day that were refined that week were 2.0% more than the 16,476,000 barrels of crude that were being processed daily during the week ending September 19th of 2025, and 1.8% more than the 16,513,000 barrels that were being refined during the pre-pandemic week ending September 20th, 2019, when our refinery utilization rate was at 89.8%, which was a bit below the pre-pandemic normal utilization rate for this time of year…

With the decrease in the amount of oil that was being refined this week, gasoline output from our refineries was also lower, decreasing by 54,000 barrels per day to 9,590,000 barrels per day during the week ending September 18th, after our refineries’ gasoline output had increased by 366,000 barrels per day during the prior week… This week’s gasoline production was 1.2% less than the 9,707,000 barrels of gasoline that were being produced daily over the week ending September 19th of last year, and 6.3% les than the gasoline production of 10,240,000 barrels per day seen during the prepandemic week ending September 20th, 2019….at the same time, our refineries’ production of distillate fuels (diesel fuel and heat oil) decreased by 68,000 barrels per day to 5,159,000 barrels per day, after our distillates output had decreased by 121,000 barrels per day during the prior week.  Even after those production decreases, our distillates output was 3.5% more than the 4,984,000 barrels of distillates that were being produced daily during the week ending September 19th of 2025, and 3.2% more than the 5,000,000 barrels of distillates that were being produced daily during the pre-pandemic week ending September 20th, 2019….

With this week’s decrease in our gasoline production, our supplies of gasoline in storage at the end of the week fell for the twenty-fifth time in thirty-two weeks, decreasing by 1,686,000 barrels to 206,046,000 barrels during the week ending September 18th, after our gasoline inventories had increased by 794,000 barrels to a 42 week low during the prior week.  Our gasoline supplies fell this week because the amount of gasoline supplied to US users rose by 49,000 barrels per day to 8,847000 barrels per day, and because our imports of gasoline fell by 136,000 barrels per day to 401,000 barrels per day, while our exports of gasoline fell by 117,000 barrels per day to 838,000 barrels per day… After fifty-five gasoline inventory withdrawals over the past eighty-three weeks, our gasoline supplies were 4.9% lower than last September 19th’s gasoline inventories of 216,569,000 barrels, and about 6% 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 fourteenth time in thirty-two weeks, decreasing by 428,000 barrels to 107,431,000 barrels during the week ending September 18th, after our distillates supplies had increased by 1,585,000 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 474,000 barrels per day to 3,975,000 barrels per day, and even as our exports of distillates fell by 283,000 barrels per day to 1,331,000 barrels per day, while our imports of distillates fell by 29,000 barrels per day to a ​fifty two week low of 85,000 barrels per day… After 29 withdrawals from distillates inventories over the past 62 weeks, our distillates supplies at the end of the week were 12.7% lower than the 122,999,000 barrels of distillates that we had in storage on September 19th 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 exports and the slowdown in our refining, our commercial supplies of crude oil in storage rose for the 11th time in twenty-six weeks, and for the 27th time over the past year, increasing by 2,969,000 barrels over the week, from 423,429,000 barrels on September 11th to 426,398,000 barrels on September 18th, after our commercial crude supplies had decreased by 640,000 barrels over the prior week….After this week’s increase, our commercial crude oil inventories were about 2% above recent five-year average of commercial oil supplies for this time of year, and they were about 30% above the average of our available crude oil stocks as of the fourth weekend of September 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 increase was the first in four weeks, and as of September 18th our commercial crude inventories were 2.8% above the 414,754,000 barrels of oil we had in commercial storage on September 19th of 2025, and were 3.2% more than the 413,042,000 barrels of oil that we had in storage on September 20th of 2024, and 2.4% more than the 416,287,000 barrels of oil we had left in commercial storage on September 22nd of 2023…

This Week’s Rig Count

The US rig count increased by four ​to a 28 month high over the week ending September 25th, as the number of rigs targeting oil was up by three, the count of rigs targeting natural gas was up 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 September 25th, the second column shows the change in the number of working rigs between last week’s count (September 18th) and this week’s (September 25th) count, the third column shows last week’s September 18th 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 26th of September, 2025…

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August’s retail sales, industrial production, and new housing construction; July’s business inventories

Widely watched economic reports released last week included the Retail Sales Report for August and the Business Sales and Inventories report for July, both from the Census bureau, the August Industrial Production and Capacity Utilization report from the Fed, and the August report on New Residential Construction, also from the Census bureau.…in addition, on Friday the Bureau of Labor Statistics released the Regional and State Employment and Unemployment Report for August, a report which breaks down the two employment surveys from the monthly national jobs report by state and by region….while the text of that report provides a useful summary of this data, the serious statistics 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…

This week also saw the release of the first two regional Fed manufacturing surveys for September: the Empire State Manufacturing Survey from the New York Fed, which covers New York, northern New Jersey, a county in Connecticut, and Puerto Rico, reported their headline general business conditions index fell from a four year high of +20.6 in August to +7.6 in September, meaning that a smaller plurality of Second District manufacturers reported improvement in business conditions in September than a month earlier, while the Philadelphia Fed Manufacturing Survey for September, covering most of Pennsylvania, southern New Jersey, and Delaware, reported their broadest diffusion index of manufacturing conditions fell from from +47.4 in August. to +37.8 in September, which they explain was because 45.3% of the respondents reported an increase in general business activity, while 7.5% reported a decrease from August to September….

Retail Sales Rose 1.2% in August after July’s Sales Were Revised 0.1% Higher

Seasonally adjusted retail sales rose 1.2% in August after retail sales for July were revised 0.1% higher…the Advance Retail Sales Report for August (pdf) from the Census Bureau estimated that our seasonally adjusted retail and food services sales totaled $773.9 billion during the month, which was up 1.2 percent (±0.4%) from July’s revised sales of $764.5 billion, and 6.0 percent (±0.5 percent) higher than the adjusted sales in August of last year….estimated unadjusted sales, extrapolated from a survey of a small sampling of retailers, indicated actual sales were virtually unchanged, rising from $784,603 million in July to $784,846 million in August, while they were up 5.3% from the $745,232 million of sales in August of last year…

July’s seasonally adjusted sales were revised more than 0.1% higher, from the $763.6 billion reported last month to $764.5 billion, while June sales were revised nearly 0.1% higher, from $768.1 billion to $768.6 billion, and as a result of that small difference, the rounded June to July change was revised from down 0.6 percent (±0.4 percent) to down 0.5 percent (±0.2 percent)…the upward revision to June’s sales means that the annualized rate of nominal 2nd quarter sales was roughly $1.9 billion higher than was previously reported, which would probably add 0.02 or 0.03 percentage points to the 2nd quarter GDP growth rate when the 3rd GDP estimate is published next week…

Included below is a copy of the table of the monthly and yearly percentage changes in retail sales by business type taken from the August Census Marts pdf….the first double column below gives us the seasonally adjusted percentage change in sales for each type of retail business from July to August in the first sub-column, and then the year over year percentage change for those businesses since last August in the 2nd column; the second pair of columns gives us the revision of last month’s July advance monthly estimates (now called “preliminary”) as revised in this report, likewise for each business type, with the June to July change under “Jun 2026 (r)revised”, and the revised July 2025 to July 2026 percentage change for each business type in the last column shown…if you want to see which July sales were revised, our copy of the table of last month’s advance July sale estimates, before this month’s revision, is here….

To compute August’s real personal consumption of goods data for national accounts from this August retail sales report, the BEA will initially use the corresponding price changes from the August consumer price index, which we reviewed last week, to adjust nominal dollar sales for inflation….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 August retail sales excluding the 3.1% increase in sales at gas stations were up by 1.1%….then, by subtracting the figures representing the 0.4% increase in grocery & beverage store sales and the 1.2% increase in food services sales from the figures behind that percentage, we find that core retail sales were up by 1.17% month over month…since the August CPI report showed that the the composite price index of all goods less food and energy goods was 0.1% higher in August, we can thus figure that real retail sales excluding food and energy, or real core PCE, will show an increase of about 1.07% for the month…however, the actual adjustment in national accounts 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 motor vehicle and parts dealers were 0.6% higher in August, the price index for transportation commodities other than fuel was was 0.3% higher, as average prices for new vehicles rose 0.3%, which means that real sales of automobiles only rose by about 0.3%…

In addition to figuring those core retail sales, to make a complete estimate of August real PCE, we should also adjust food and energy retail sales for their price changes separately, just as the BEA will do…the August CPI report showed that the food price index rose 0.1% in August, as the price index for food purchased for use at home was unchanged, while average restaurant prices were 0.3% higher….with no change in grocery prices, the 0.4% nominal increase in grocery & beverage store sales nominal sales would be a real 0.4% increase…on the other hand, 1.2% increase in sales at bars and restaurants, once adjusted for 0.3% higher prices, suggests that real sales at bars and restaurants were up by about 0.9% for the month…meanwhile, while nominal sales at gas stations were up 3.1%, there was a 4.1% increase in the price index for gasoline, which would suggest real sales of gasoline were almost 1.0% lower, with a 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 a bit less than our blunt estimate….by appropriately weighing 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 August will show that real personal consumption of goods rose by around 0.8% in August, after falling by a revised 0.5% in July and after rising by a revised 0.7% in June, and rising by 0.3% in May, but after falling 0.2% April, after rising by 0.9% in March, rising by 0.8% in February and falling by 0.6% in January….at the same time, 0.9% increase in real sales at bars and restaurants would have a modest positive impact on July’s real personal consumption of services…

Industrial Production Unchanged in August as Increased Utility Output Offsets Reduced Manufacturing

The Fed’s August report on Industrial production and Capacity Utilization indicated that industrial production was unchanged in August, after rising by a revised 0.2% in both June and July, and is now up 1.4% from a year ago….the industrial production index, with the benchmark now set for average 2017 production to equal to 100.0, rose to 103.1 in August from 103.0 in July, after July’s index was revised but unchanged from the 103.0 that was reported for July a month ago…at the same time, the June reading for the IP index was revised but unchanged at 102.8, the May reading for the IP index was revised from 102.5 up to 102.6. the April reading for the index was also revised from 102.5 to 102.6, and the March reading for the index was revised down from 101.8 to 101.7. ..

The manufacturing index, which accounts for more than 75% of the total IP index, fell by 0.3%, from 98.43 in July to 98.16  in August, after the June reading for the manufacturing index was revised but unchanged at 98.3, the May reading for the manufacturing index was revised from the 98.0 published last month to 98.1, the April reading for the manufacturing index was also revised from 98.0 to 98.1, and the March manufacturing index was revised up from 97.3 to 97.4….meanwhile, the mining index, which includes oil and gas well drilling, rose 0.1% to 122.7 in August, after the July mining index was revised up from 122.4 to 122.5, leaving the mining index up by 0.3% from a year ago….finally, the utility index, which often fluctuates due to above or below normal temperatures, was rose by 1.8%, from 111.1 in July to 113.0 in August, after the July utility index was revised up from 110.7 to 111.1, and after the June utility index was revised from 110.2 to 110.5…with this August’s air conditioning demand much stronger than that of last year, the utility index is now 6.2% above its year ago reading of 106.4..

This report also provides capacity utilization figures, which are 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 was unchanged at 76.3% in August, with July’s utilization figure unrevised from the 76.3% reported a month ago…capacity utilization of NAICS durable goods production facilities was fell from 76.3% in July to 75.8% in August, while capacity utilization for non-durables producers fell from 75.7% in July to 75.6% in August, after July’s non-durables utilization was revised up from 75.6%…meanwhile, capacity utilization for the mining sector rose to 86.3% in August from 86.2% in July, which was originally reported as 86.1%, while utilities were operating at 71.3% of capacity during August, up from their 70.2% of capacity during July, which was revised up from 70.0%…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….

Business Sales Rose 0.3% in July, Business Inventories Rose 0.8%

After the release of the August retail sales report, the Census Bureau released the composite Manufacturing and Trade Inventories and Sales report for July (pdf), which incorporates the revised July retail data from that August retail report and the earlier published July factory data and last week’s July wholesale trade report to give us a consolidated picture of the business contribution to the economy for that month….according to the Census Bureau, total manufacturer’s and trade sales were estimated to be valued at a seasonally adjusted $2,120.7 billion in July, up 0.3 percent (±0.2%) from June’s revised sales, and 8.9 percent (±0.3 percent) above July’s sales of a year earlier…note that June’s total sales were concurrently revised up from the originally reported $2,111.3 billion to $2,111.66 billion with this report, which is now shown as down 1.0% from May, revised from the 1.1% decrease reported last month….manufacturer’s sales were up 0.8% to $658,833 million in July, while retail trade sales, which exclude restaurant & bar sales from the revised July retail sales reported earlier, fell 0.7% to $660,638 million, while wholesale sales rose 0.8% to $801,278 million..

Meanwhile, total manufacturer’s and trade inventories, a major component of GDP, were estimated to be valued at a seasonally adjusted $2,764.7 billion at the end of July, up 0.8% (±0.1%) from June, and 3.8 percent (±0.5 percent) higher than in July a year earlier…the value of end of June inventories was revised from the $2,740.2 billion reported last month to $2,742.5 billion, which is now up 0.1% from June…seasonally adjusted inventories of manufacturers were estimated to be valued at $966,871 million, 0.4% higher than in June, inventories of retailers were valued at $838,983 million, 0.8% more than in June, while inventories of wholesalers were valued at $958,854 million at the end of July, up 1.3% from June…

With the original release of the factory inventory data two weeks ago, we judged that the real change in July factory inventories would result in a significant boost to the growth rate of 3rd quarter GDP, because they’d be modestly positive vs the sharply negative real factory inventories in the second quarter; then, with the release of the wholesale inventory last week, we figured that since real July wholesale inventories were also higher, coming after a large 2nd quarter decrease, they’d also be sharply positive for 3rd quarter GDP….meanwhile, since the producer price index for July showed that prices for finished goods were on average 0.4% lower, that means that real retail inventories were roughly 1.2% higher for the month….since real retail inventories saw a modest increase in the second quarter, whether the third quarter’s increase in real inventories adds or subtracts from GDP will depend on which quarter’s inventory increase is ultimately higher…

New Housing Starts and Building Permits Fell in August

The August report on New Residential Construction (pdf) from the Census Bureau indicated that their widely watched estimate of new housing units that were started during the month was at a seasonally adjusted annual rate of 1,275,000, which was 2.6 percent (±12.0 percent)* below July’s revised July estimated annual rate of 1,309,000 housing unit starts, and was 1.2 percent (±10.8 percent)* below last August’s pace of 1,291,000 housing starts a year…the asterisks indicate that the Census does not have sufficient data to determine whether housing starts actually rose or fell from July, or even from August of last year, while the figures in parenthesis indicate the most likely range of the changes indicated; in other words, August’s housing starts could have been up by 9.4% or down by as much as 14.6% from those of July, with a 10% chance that the actual change could have even been outside of that wide range…in this report, the annual rate for July housing starts was revised from the 1,239,000 reported last month to 1,309,000, while June’s housing starts, which were first reported at a 1,427,000 annual rate, were revised from last month’s initial revised figure of a 1,415,000 annual rate to an annual rate of 1,439,000 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 Census field agents, which estimated that 110,500 housing units were started in August, down from the 118,800 units started in July, and down from 135,300 housing starts in June…of those housing units started in August, an estimated 80,800 were single family homes and 28,600 were units in structures with more than 5 units, up from the revised 77,300 single family starts in July, but down from the 40,500 units started in structures with more than 5 units in July…

The monthly data on new building permits, with a smaller margin of error, is probably a better monthly indicator of new housing construction trends than the volatile and often revised housing starts data…in August, Census estimated new building permits were being issued for a seasonally adjusted annual rate of 1,394,000 housing units, which was 2.7 percent below the revised July rate of 1,433,000 permits, but was 3.5 percent above the rate of building permit issuance in August a year earlier…the annual rate for housing permits issued in July was revised to 1,433,000 units from the annual rate of 1,443,000 reported last month…

Again, these annual estimates for new permits reported here were extrapolated from the unadjusted estimates of canvassing census agents, which showed permits for roughly 117,400 housing units were issued in August, down from the revised estimate of 128,900 new permits issued in July…the August permits included 74,000 permits for single family homes, down from 80,600 in July, and 39,200 permits for housing units in apartment buildings with 5 or more units, down from 43,200 such multifamily permits a month 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…)