After large increases in oil prices and bond yields recently, energy and fixed income markets are stopping to catch their breath. Equities are rising in response, while gold and silver are recouping earlier losses. The dollar is flat.
In the commodities arena, oil prices aren’t the biggest story though. The prices of refined products like diesel and gasoline have risen more than crude in recent weeks. RBOB gasoline futures are up 85.8% year-to-date, for instance, outpacing the 56.3% rise in WTI crude futures.
Gasoline (Red), Crude (Blue) - YTD % Change
Source: TradingView
Result: US retail diesel prices just hit $5.68 per gallon, the highest since April. Gasoline has also climbed to around $4.10 per gallon, according to AAA. August’s prices overall were the highest for that month on record.
That said, the Trump Administration and Chevron Corp. (CVX) have talked about boosting production in Venezuela recently. Chevron just said it will invest more than $7 billion over the next half-decade to raise its Venezuelan output to around 600,000 barrels per day. Those moves could help keep a lid on crude prices.
Global bond markets also started settling down today after yields hit highest since 2008 yesterday. But investors worry the respite will prove fleeting. Finance ministers spent most of this week’s G-20 summit in North Carolina squabbling over various issues rather than tackling problems. Plus, leaders of individuals nations continue to borrow and spend freely in the face of rising inflation pressures.
Lastly, the axe is swinging at Uber Technologies Inc. (UBER). The company plans to cut 3,300 jobs, or about 10% of its workforce. CEO Dara Khosrowshahi said the restructuring will reduce redundant management layers and allow the company to invest more in its various robotaxi, food delivery, and ride-sharing businesses. Uber stock is down 7.9% year-to-date.
