According to the latest data from financial data account The Kobeissi Letter, the national average retail price of diesel in the U.S. has reached a record high of $6.45 per gallon, an increase of 40 cents from a week ago; this marks the third time in two weeks that the average diesel price in the U.S. has set a new record.

Looking at a longer time frame, the increase is even more pronounced: over the past month, the average diesel price in the U.S. has risen by $1 per gallon; since January of this year, the cumulative increase in diesel prices has reached 84%. Several energy analysts have previously estimated that, when converted to crude oil equivalents, consumers are currently paying a cost for diesel equivalent to crude oil prices of about $250 per barrel, far exceeding current actual crude oil quotes.

California's situation is even more extreme, with the average diesel retail price there rising to $8.40 per gallon, setting a record for the highest average price in a single region in U.S. history; previous reports have indicated that the average diesel price in some California cities is nearing $8.50 per gallon, with some gas stations displaying prices that have reached the maximum display limit of $9.999 per gallon.

Alongside the surge in oil prices, market expectations for a Federal Reserve interest rate hike in October have also reached new highs. The Fed announced a 25 basis point rate hike during the week of September 17, raising the federal funds rate range to 3.75%-4%; both Goldman Sachs and Morgan Stanley expect the Fed to raise rates by another 25 basis points in October to address inflationary pressures stemming from rising oil prices—indicating that the Fed is attempting to counteract an inflation shock originating from the supply side rather than the demand side through tightening monetary policy.

Analysis from JPMorgan indicates that rising diesel prices often first reflect in corporate operating costs before gradually transmitting to consumer prices, a process that typically involves a time lag. Meanwhile, energy analyst Andy Lipow noted that current gasoline prices in the U.S. are at "the highest level for this time of year in history," marking the most expensive September on record, and the continuously rising oil prices have begun to suppress end demand.

From a financial and asset linkage perspective, the surge in oil prices combined with rising interest rate expectations is creating synchronized pressure on multiple asset classes: Bitcoin's year-to-date decline has expanded to nearly 12%, trading at about $76,400; gold prices have significantly retreated from the year's historical high of about $5,600, currently maintaining relative stability; tech stocks are also believed to face similar valuation pressures. This energy cost shock, triggered by geopolitical conflicts and a contraction in refining capacity, is transmitting pressure from the real economy's transportation, agriculture, and logistics sectors further into financial markets such as cryptocurrencies, precious metals, and equity assets, forming a negative feedback loop that reinforces the interplay between energy, inflation, and asset prices.

The current upward momentum in diesel prices primarily stems from the ongoing escalation of geopolitical conflicts in the Middle East and the structural contraction of domestic refining capacity in the U.S. (including the shutdown of two major refineries in California), which have combined to drive U.S. diesel prices from around $3.70 per gallon to $6.45 per gallon in less than a year.

Source: Public information