Wholesale fuel costs jump 6.3% in September, biggest since December 2022, as crude holds at $104.91
The Labor Department's producer price index rose 6.3% in September from a year ago, the fastest increase since December 2022, and gasoline costs did most of the lifting. The PPI measures wholesale prices, so it is what shows up on your invoices before anything reaches the pump. If you buy at the rack and sell to c-stores or haul for your own sites, your cost of goods went up faster last month than it has in nearly three years, and the margin you keep depends on how fast you pushed that through.
The driver is crude. Brent is $104.91 a barrel after slipping about 1%, and it has stayed elevated while traders weigh what happens around the Strait of Hormuz. High and jumpy crude is the worst mix for a jobber. Your replacement cost keeps moving, and every load you pre-bought looks either smart or expensive by the time it lands.
Hormuz workaround
Gulf producers are scrambling to keep barrels moving, and the vessel data shows it. Ship-to-ship transfers outside Hormuz got so crowded that operations spread to India's west coast, where 82 cargoes, about 680,000 bpd, were moved onto larger ships in the Gulf of Kutch in September, per Vortexa data cited by The National.
The oil is still flowing, just by a longer route. For a US buyer it cuts two ways. Barrels reaching the water keep the global balance from tightening further, which caps how high crude runs. Longer voyages and extra handling add cost and risk, and any headline out of the strait can put a scare premium back into the screen in an afternoon.
LNG pull
Europe's gas benchmark is near its highest since late 2022. Dutch TTF is $96.56 per MWh, with Qatari LNG still choked at Hormuz and EU storage running light into winter. This is a foreign story, but it reaches US racks through the export door. Expensive European gas pulls hard on US LNG cargoes and feedstock, and that keeps upward pressure on US natural gas and on the diesel and gasoline costs tied to refining and freight.
For now the pull is a background cost, not a shock. Watch whether it starts showing up in your winter diesel basis.
What to watch
Next month's PPI print will show whether September's 6.3% was a peak or the start of a run. Watch Hormuz headlines for the crude scare premium that sent Brent higher. And keep an eye on US natural gas as European buyers chase LNG, because that bleeds into your rack diesel before you see it at the terminal.