Oil at $107 is the reason your inflation number has not fallen
West Texas Intermediate was $107.02 a barrel on September 15. Gasoline is up 27.4% over twelve months, and that one component is the whole gap between headline and core inflation.
- What happened
- West Texas Intermediate crude was observed at $107.02 a barrel on September 15, 2026. Gasoline prices rose 27.4% over the twelve months to August, and energy overall rose 16.3%.
- Why
- Crude is the input to refined fuel, and fuel is both a direct line in the consumer price basket and a cost inside almost everything that has to be moved.
- The numbers that matter
- $107.02WTI, September 15, 2026+27.4%Gasoline, 12 months+16.3%Energy, 12 months1.0ppHeadline minus core CPI
- Why it matters
- Energy is the difference between an inflation rate near target and one a full point above it — and it is the component households have least ability to substitute away from.
- What happens nextas we saw it on 21 Sep 2026
- The September CPI report is scheduled by the Bureau of Labor Statistics and will carry the next energy reading.
Gasoline rose more than eleven times as fast as the core basket.
| Gasoline | 27.4% |
|---|---|
| Energy (all) | 16.3% |
| Headline CPI | 3.4% |
| Core CPI | 2.4% |
On September 15 a barrel of West Texas Intermediate crude was observed at $107.02. That is the number sitting underneath almost every complaint about the cost of living in 2026.
How crude becomes inflation
Refined fuel is the direct route. Gasoline appears in the consumer price basket as its own line, and over the twelve months to August it rose 27.4%. Energy as a whole rose 16.3%.
Headline CPI rose 3.4% over twelve months; core CPI, which excludes food and energy, rose 2.4%. Shelter rose 3.0% and food 2.7% — neither far enough from the headline to account for the difference.
There is a second, slower route. Fuel is a cost inside freight, and freight is a cost inside almost every physical good. That pass-through takes months and is much harder to isolate, which is why we are not going to put a number on it.
Crude is one input into what a driver pays. Refining margins, distribution and taxes sit between the two, and they do not move together. A 27.4% rise in gasoline and a $107 barrel are related figures, not the same figure measured twice.
Why it matters for interest rates
It mostly does not, directly. Interest rates do very little to the global oil price. What a central bank watches for is whether an energy shock starts showing up in wages and rents — the part that persists after crude falls back.
So far, it has not: core inflation at 2.4% is within touching distance of the Federal Reserve's 2% goal. The committee still raised rates on September 16, and its statement called inflation elevated — which is a statement about the headline number, not the core one.
Sources
- Crude Oil Prices: West Texas Intermediate (DCOILWTICO), observation of September 15, 2026U.S. Energy Information Administration via FRED · Sep 15, 2026 · Primary source
- Consumer Price Index Summary — August 2026U.S. Bureau of Labor Statistics · Sep 11, 2026 · Primary source
- FOMC statement, September 16, 2026Federal Reserve Board · Sep 16, 2026 · Primary source
Related analysis
Inflation is 3.4%. Inflation is also 2.4%. Both are correct.
The Federal Reserve watches one of these numbers and you pay the other. The gap between them in August was almost entirely the price of energy.
24.6%
Inflation is 3.4%. Gasoline is up 24.6% over the same twelve months. That gap explains almost every argument about the economy in the summer of 2026.
Pay rose 3.1% in the year to August. Prices rose 3.4%.
Average hourly earnings reached $37.75 in August. Measured against inflation over the same twelve months, the average worker went slightly backwards.