Tues., Aug. 18, 2026
[4:10 PM ET…closing prices for stocks, 3:50ish for commodities and bonds]
Tale of the Tape at the gas pump, nationwide averages, courtesy of AAA.
Fri., Feb. 27…regular $2.98…diesel $3.75
Tues., Aug. 18…regular $4.06…diesel $5.46
Crude oil futures (WTI) hit $85.50 today, $91.50 on Brent, while gasoline futures hit $3.32. That $4.06 figure you see above at the pump could be north of $4.10 shortly.
[Both oil and gas futures then backed off a bit late in the day.]
But the persistently high yields, like on the 10- and 30-year Treasuries are increasing the cost of refinancing debt and funding future deficits, with investors demanding greater compensation to absorb Washington’s borrowing needs as the national debt approaches $40 trillion, while the fiscal deficit remains large. [Bank of America’s Michael Hartnett estimates the national debt will hit $50 trillion by summer 2029.]
The 30-year (5.30%) is at 19-year-highs, settling at 5.31% Monday, the highest settlement since June 12, 2007.
Recently, longer-term Treasuries have been reactive to oil prices. WTI and the 30-year have exhibited a close correlation, ditto the 10-year yield.
But supply could be the main reason for the spike higher, in that investors have had to digest $125 billion in new medium- and long-term Treasury debt.
The bond selloff, however, is global, with investors doubling down on bets for an extended closure in the Strait of Hormuz amid no advances in peace talks, while the Houthis have escalated attacks on shipping along the Red Sea coast.
The German 10-year is at 3.26%, a 15-year high; France’s 10-year is 4.11%, highest since 2008; and in Japan, the 10-year yield of 2.93% is the highest in 30 years.
Back to crude oil, President Trump has said Washington is not currently holding or planning talks with Tehran, while the U.S. naval blockade remains in place, and shipping risks prevail.
A vessel heading out of the Strait was struck by an unknown projectile, the UK Maritime Trade Operations reported Tuesday, with engine room damage and one crew member injured.
Iran said it has finalized a “shipping map” as part of a broader agreement for governance of traffic in the Strait with Oman, but talks are continuing and a deal won’t necessarily translate into a reopening. Tehran has demanded the U.S. first remove its blockade.
But Gulf producers are finding ways to maintain exports despite the disruption, and this is why you aren’t seeing higher prices.
Then there is diesel. The margin for making diesel from crude oil in the U.S. has soared to more than $100 a barrel, setting new all-time highs as a global fuel-making crunch continues to exacerbate fuel prices.
The widely watched gauge, known as the diesel crack spread, hovered around $100 a barrel on Tuesday, down slightly from record highs over $102 a barrel. The spread settled in triple digits for the first time on Monday.
Before this year, the measure had never risen above $89 a barrel, with the prior record set in October 2022 as the world grappled with a shortage of the fuel heading into the first winter of the Russia-Ukraine war.
Now, disruptions from Ukrainian drone attacks on Russian refineries prompted temporary bans on exports of the fuel from the key producer, pushing up prices globally as buyers scramble to secure alternate supplies.
U.S. diesel exports, already at record highs, are filling some of the gaps, but domestic supplies are the lowest entering the end of August since 1996.
And the massive profits for the refiners (think Valero*) are incentivizing them to defer planned maintenance work, raising the risk of unplanned outages that disrupt fuel processing and send prices surging even higher at some point.
*Valero is making a killing on diesel. Its shares hit a 52-week high of $351 (currently trading near that level today) and were as low as $103 on March 24, 2025.
—
Yesterday, I noted President Trump’s outrageous post concerning North Korea and his “very good relationship” with Kim Jong Un, while slamming ally South Korea.
Last night, the Wall Street Journal editorialized in part:
“This will reinforce the growing belief in Asia and Europe that the U.S. is becoming an unreliable ally. It may also increase the calls in the South for Seoul to develop its own nuclear deterrent to counter the growing nuclear arsenal in North Korea. Mr. Trump may not mean for any of this to happen, but in the wake of Mr. Trump’s uncertain trumpet on Iran, the world is wondering about U.S. staying power.
“On that note, Mr. Trump might be trying to change the subject from the stalemate with Iran over the Strait of Hormuz. Or he might be trying to appease Mr. Kim at a moment when U.S. weapons stocks and deployments are stretched. The U.S. is currently moving its last aircraft carrier task force out of the western Pacific to relieve the USS Abraham Lincoln that is coming home after an extended deployment.
“China is happy to see the USS George Washington leave the Pacific, as it seeks to persuade countries in the region that they can’t count on the U.S. for defense. China may not use this opportunity to move against Taiwan, but it has been ratcheting up its aggressive moves against Taiwan, Japan and the Philippines in the East and South China Seas.”
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Dow Jones -116…-0.2% [53343]
S&P 500 -53…-0.7% [7691]
Nasdaq -355…-1.3% [26289]
Oil (WTI) $84.95…Brent $90.90
Gold $4340
Silver $63.45
Bitcoin $64,604 [4:00 PM ET]
U.S. 2-yr. 4.17%
U.S. 10-yr. 4.71%
Japanese 10-yr. 2.93%
Back Wed.
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Brian Trumbore
Drop me a line…briannovak24@gmail.com.
