CPI Data Released Amid Oil Market Volatility
The Consumer Price Index (CPI) showed a 0.3% monthly increase and a 2.4% annual rise, aligning with expectations. Core CPI rose 0.2% monthly and 2.5% annually, also meeting forecasts. Notably, the shelter component of CPI only saw a 0.2% increase month-over-month, with rent costs rising just 0.1%—the smallest monthly increase since January 2021. Despite these figures indicating easing inflation, their relevance is questioned given the recent oil price spike linked to the conflict in Iran.
On the oil market front, prices briefly soared to approximately $115 per barrel following tensions in the Middle East but have since dropped to the upper $80s. Comparatively, this is 34% above the average price of West Texas Intermediate Crude (WTIC) before U.S. strikes on Iran, which hovered just over $65. The International Energy Agency (IEA) is set to release 400 million barrels, its largest emergency action to date, to stabilize the market amid these disruptions.
Additionally, aluminum prices surged nearly 10% amid supply concerns due to the Iranian conflict, reaching a three-year high. With the Middle East supplying around 9% of global aluminum, any shipment disruptions could impact global supply chains. Current global aluminum consumption, estimated at 104 million tons in 2024, is projected to rise to 120 million by 2030, driven partly by demand from AI infrastructure.
