Spiking Diesel Inflation Could Fuel Deflation At about 170%, the 12-month rate of change in the Bloomberg Heating Oil Subindex Total Return (diesel) to Oct. 23 has never been higher (since 1988), with post-inflation deflation implications. Overlaid with the consumer price index, the diesel surge could mirror the roughly 130% spike to February 2000. By 4Q01, the diesel index's 12-month ROC bottomed near minus 36%, and CPI dropped to about 1% from its 3.8% apex in 1Q00. The latest CPI reading is 3.7%. What stops it from mirroring the 2000-01 disinflation? The roughly 20% decline in the S&P 500 in 2000-01 was a top reason for disinflation then, and deflation risks appear greater now. The S&P 500-to-GDP ratio (in trillions x 100) is about 2.4x now vs. closer to 1.5x at the start of 2000. A net importer in 2000, the US was the world's largest diesel exporter in September. Full report on the Bloomberg here: https://blinks.bloomberg.com/news/stories/tn5d58kgzakd {BI COMD} #Crude #energycrisis #Stocks @BBGIntelligence