U.S. consumer prices rose 3.7% over the 12 months through September, with gasoline up 34.2% and fuel oil up 74.2%. Semafor's Tim McDonnell argues the data leave President Trump little time to change the picture before the midterms. Oilprice.com's Haley Zaremba says the episode pushes more countries toward wind and solar.
U.S. consumer prices rose 3.7% over the 12 months through September, and energy supplied much of the increase. The Bureau of Labor Statistics released the figures in its October 14 Consumer Price Index report, and they came in higher than most projections.
Gasoline and fuel oil lead the climb
Gasoline rose 34.2% over the same period. Fuel oil, which consumers primarily use for residential heating, rose 74.2%.
Wages are not keeping pace. Business Insider reported that rising prices have outpaced pay increases over the past few months, while wage growth remains slow and steady.
The Iran war keeps prices exposed
McDonnell, climate and energy editor at Semafor, writes that the war is the proximal cause and that Trump has run out of time to change the picture before the midterm election. Crude is flowing through the Strait of Hormuz again after months of blockages, but violence and disruption in the waterway have become the new normal, according to the article.
McDonnell also argues that domestic drilling can't shield American consumers from global price turmoil, even though it has put more of the supply-demand balance under U.S. control.
Renewables pitched as a hedge against price swings
The article says the war has pushed countries to diversify their energy mixes, and that countries have almost universally found renewable energy to be the best option. David Frykman, General Partner at Norrsken, wrote in a Fortune op-ed: "Wind and solar cannot be embargoed, blockaded, or shut off by a foreign power."
McDonnell acknowledges that the clean energy transition carries its own inflationary risks. He argues the benefit of predictably priced output outweighs them, and that a world with very boring energy prices would leave inflation more divorced from geopolitics.
Source: Oilprice.com
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