Expensive Diesel: What Does it Signal?

By Gill Segal

Diesel now costs more than twice as much as crude on a per-barrel basis. Using data since 2006, I find that unusually high diesel/oil ratios have preceded slower headline inflation four to nine months later, even after accounting for oil prices and starting inflation. I examine what that could mean for the Fed in 2027 and test a shorter-term trade that buys US refiners against the broader oil-and-gas sector.