Edward Meir's week in review and thoughts for the week of Sept. 14, 2026

Energy price shock set to worsen

Later on Friday, crude prices received another boost on reports of missile attacks on the Saudi East-West Pipeline. Nearby pumps caught fire, causing injuries. Over the weekend, the Saudis said that, as a “precautionary measure,” pipeline operations would be suspended. They offered no timeline as to when the oil could start flowing again.

The attacks originated from Iraq, drawing an angry rebuke from the Saudis. The Iraqi prime minister condemned the attacks and vowed to investigate. But the incident illustrates the variety of countries from which missiles could be launched with relative impunity, including Iran, Iraq, Yemen, and Lebanon. We expect to see yet another push higher in crude prices once Monday trading gets underway.

Meanwhile, US diesel prices hit a record $6 per gallon last week. That will have a forceful impact on American pocketbooks, just like higher gasoline prices are having. GasBuddy’s head of petroleum research was quoted as saying, “Americans [should] anticipate a costlier holiday season. … Record diesel prices will impact every cargo, [every] shipment, every delivery.” We agree with that. Farmers and manufacturers will also experience rising costs.

Elsewhere in energy, the Financial Times said last week that Persian Gulf foreign ministers will be meeting with the Iranians soon to attempt a restart of shipping through the Strait of Hormuz. Reuters reports the proposed summit will be “an Omani initiative [and the] first meeting between the top diplomats from the six-member Gulf Cooperation Council and a senior Iranian official since the … war against the Islamic Republic in February.” It is hoped that striking a deal could indirectly lead to the US easing its blockade of Iranian ports. But we doubt the progress will reach that far.

We had some fresh oil projections from the International Energy Agency (IEA) on the crude supply/demand balances. The IEA now expects world crude supply this year to decline by a significant 5.7 million barrels a day (a 6% drop), a larger decline from its earlier projection. Crude demand in 2026 is also weakening. It is now expected to be off by 2.5 million barrels per day compared to the IEA’s previous estimate of a decline of 1.6 million barrels per day.

But supply is falling at a much faster rate, depleting inventories in the process. In fact, global stocks fell by 3.1 million barrels per day in August, the IEA said. They now stand at a three-year low. “With buffers shrinking and the global refining system stretched to the limit, the need for progress in resolving the conflict in the Middle East—and the Russia-Ukraine war, which is now in its fifth year—is greater than ever to avoid further market tightening,” the IEA noted.

Base metals

Outside of energy, we saw rather large moves in base metals, especially in copper. For months now, the copper market has been waiting for a White House decision on tariffs on copper cathode imports. But this past week, investors were concluding that not coming out with a decision was perhaps a decision itself.

As a result, copper prices crashed last week on a Bloomberg report that the White House was uncertain as to what to do. Prices traded from a record high of $14,875 per metric ton ($6.75/lb) on Thursday to a low of $14,147/ton ($6.42/lb) by day’s end. CME prices ended on Friday at $6.56/lb, down $0.34/lb from an intraday high of $6.90/lb. The CME/LME premium, meanwhile, crashed from a $300/ton backwardation to just about flat. If the Trump administration decides to take a pass on imposing tariffs or even continues to say nothing at all, we should start to see some of the roughly 700,000 tons of copper stockpiled in CME warehouses to seep out, most likely onto the tight export market.

For the week, copper ended down by 1.22% as did aluminum, while zinc lost 1.65%. Tin and nickel were each down by about 2%-2.5%, with nickel now at two-month lows. In the precious metals space, gold and silver were each down by about 2%. US HRC prices retreated slightly this past week as well.

Equities and treasuries

US equity averages finished lower in the holiday-shortened week as the surge in oil and a sharp rise in Treasury yields created headwinds for stocks. The S&P 500 declined 0.8% on the week, the NASDAQ fell 0.7%, and the Dow lost 1.6%. Small- and mid-cap stocks faced even greater pressure, with the Russell 2000 down 2.4%. Groups that struggled included health care (-3.6%), materials (-1.7%) and financials (-1.5%).

Treasuries saw yields on all notes and bonds hit fresh highs for the year. The two-year yield settled up 26 basis points to 4.64%. The 10-year yield settled 20 basis points higher at 4.98%. Traders now see a 70% chance that the Federal Reserve will hike rates by at least 25 basis points this week, the highest probability we have seen yet. We think they will raise rates too. But we also think the central bank will still remain “behind the curve” even if it does.

A US-Canada trade deal?

In trade news, the on-again, off-again deal between the US and Canada could be on again soon. President Donald Trump expressed optimism over the weekend about reaching a deal with Canada “fairly soon.” He also downplayed the prospect of the US quitting the USMCA altogether.

“We’re doing great. We’re going to have a great relationship with Mexico. We actually have a good one with Canada,” Trump said. On Thursday, Prime Minister Mark Carney also confirmed he had spoken to Trump. But details were not disclosed. We could see a slide in aluminum Midwest premiums this week on the back of these latest comments, especially in the forwards.

 Macro readings and other news from the past week

• US producer prices for August rose by 0.4% month-over-month. Although this was in line with estimates, the prior month was revised slightly higher (to 0.1% from unchanged in July). Core PPI was up by 0.2% month over month (m/m; consensus 0.3%) after increasing a revised 0.3% (from 0.2%) in July. However, the biggest surprise was in the annual reading. Prices here clocked in at 5.4% higher year over year (y/y), up sharply from 4.8% in July. The core PPI was up 4.6% y/y versus up 4.3% in July.

• CPI readings increased by 0.4% m/m in August, in line with consensus, following a 0.1% increase in July. The year-over-year rate came in at 3.4%, unchanged from July. But the markets still view the figures as high enough to prod the Fed to hike rates this week. Core CPI, which excludes food and energy, was up 0.3% m/m (consensus 0.2%) following a 0.2% increase in July. On a y/y basis, the core was up 2.4% versus 2.5% in July.

• In housing news, new single-family home sales dropped 10.5% in July to a 607,000 annual rate, the weakest showing since January. Supply increased to 9.6 months at the current sales pace, while the median selling price fell to $393,800, its lowest in roughly four years. Separately, the weekly MBA mortgage applications index declined by 2.7% after increasing by 0.8% in the prior week.

• Existing home sales decreased 2.0% m/m in August to a seasonally adjusted annual rate of 3.98 million units from 4.06 million in July. Sales were also down 1.2% on a y/y basis. The median existing home sales price for all housing types was up 1.6% y/y to $429,100, marking the 38th consecutive month of year-over-year increases. There was a 4.9-month supply of unsold inventory. A six-month supply typically reflects a more balanced market.

• Total consumer credit increased by $18.1 billion in July (consensus $11.3 billion).

• The NFIB small business optimism index fell to 98.7 in August (consensus 99.3) from 99.8 in July. Meanwhile, the September University of Michigan Consumer Sentiment Index came in at 47.8 (consensus 51.5), down from the prior reading of 51.7. One-year inflation expectations jumped to 4.6% from 4.0% and should be concerning to the Fed. Separately, the New York Fed found that households had become more concerned about future unemployment, job-finding prospects, personal finances, and access to credit.

• The US federal budget deficit reached $1.97 trillion through the first 11 months of fiscal 2026, already above the $1.775 trillion shortfall recorded for all of fiscal 2025. Treasury data showed year-to-date interest costs up 13%, while net customs receipts totaled only $167.3 billion after tariff refunds.

• A German Economic Institute study found that German companies increased investment in China by about one-third in the first half of 2026 while sharply reducing investment in the US. The institute said competitive pressure from Chinese producers is encouraging German companies to expand production in China.

• The ECB raised its interest rate by 25 basis points to 2.5% and increased its inflation outlook as higher energy costs continue to fuel higher prices. The Euro slipped after the decision and ended the week at around $1.16.

• Chinese customs data showed another very strong month for trade in August, with exports up 25% y/y and imports rising 28.2%. High-tech product exports were a source of strength, with semiconductors and autos posting particularly strong gains, offsetting weakness in domestic consumption and property. Also out of China, we learned that consumer inflation rose for the first time since April, reflecting higher energy prices. August CPI was up by 0.4% m/m (last 0.1%), while prices on a y/y basis were up 0.8% (last 0.5%).

• President Trump told Fox News in an interview that he would be open to Chinese automakers building vehicles in the US if they employed American workers. But he opposed Chinese-owned plants in Mexico exporting to the US market. Existing US law effectively bars Chinese passenger-car production and sales in the US, and so the comments do not represent a policy change.

This week’s US macro readings

Nothing comes out on Monday. On Tuesday, we get the Empire State manufacturing index (expected at 11.1, last 20.6). Wednesday brings the Federal Reserve policy statement and Kevin Warsh’s press conference. August retail sales numbers come out on Wednesday as well (expected at 0.8%, last 0.6%), followed by the NAHB housing market index (expected at 34, last 35). On Thursday, we get weekly initial claims (expected at 205,000, last 206,000) along with August pending home sales. Friday brings August industrial production (expected at 0.3%, last 0.2%) and August leading economic indicators (expected at 0.2%, last 0.2%).

We wish all our readers all the best for the upcoming week.