The U.S. Energy Information Administration (EIA) in its July 2023 Short-Term Energy Outlook (STEO) expects that U.S. crude oil production will rise by 670,000 barrels per day (bpd) to 12.56 million bpd in 2023 and by another 290,000 bpd to 12.85 million bpd in 2024. The EAI forecast the Brent crude oil spot price will average $78 per barrel (b) in July, and gradually increase reaching about $81/b by the end of the year and average $83.51/b next year, contributing factors include production cuts and rising demand. The EIA projected U.S. gasoline prices to average $3.40 per gallon this summer, unchanged from the previous estimate. U.S. gasoline prices are expected to average $3.51 per gallon for 2023, and $3.46 per gallon for 2024. U.S. refinery capacity is expected to average 18.3 million b/d in 2024, up from 18.0 million b/d in the January STEO. U.S. dry natural gas production is expected to remain flat and inventories are expected to decline, putting upward pressure on prices. Henry Hub prices are forecast to average more than $2.80 per million British thermal units (MMBtu) in the second half of 2023, up from about $2.40/MMBtu in the first half of the year.

The U.S. Bureau of Labor Statistics reported the consumer price index increased (+0.2%) in June, after readings of (+0.1%), (+0.4%), and (+0.1%) over the previous months. The all items index had the smallest 12-month increase since the period ending March 2021 at (+3.0%) before seasonal adjustment. This compares to (+4.0%), (+4.9%), and (+5.0%) over the previous months. The index for shelter (+0.4%) was the largest contributor to the monthly all items increase, followed by an increase in the index for motor vehicle insurance (+1.7%). The food index increased (+0.1%) in June after increasing (+0.2%) in May, and remaining unchanged in March and April. The index for energy increased (+0.6%), with increases in the indexes for gasoline (+0.8%), fuel oil (+1.0%), electricity (+0.9%) offset by a decrease in natural gas (-1.7%). Core CPI inflation which excludes food and energy increased (+0.2%) in June and follows a (+0.4%) reading for the previous three months - this is the smallest 1-month increase since August 2021. The annual rate of core CPI inflation is now at (+4.8%), as compared to (+5.3%), (+5.5%), and (+5.6%) over the previous months. The shelter index increased (+7.8%) year over year, accounting for two thirds of the total increase in Core CPI. Other indexes with significant increases over the last year include motor vehicle insurance (+16.9%), recreation (+4.3%), household furnishings and operations (+3.6%), and new vehicles (+4.1%).

The producer price index for final demand edged up a seasonally adjusted (+0.1%) in June, this follows a (-0.4%), (+0.1%), and (-0.4%) readings the previous months. The PPI is seen as a bellwether for inflation as it measures what suppliers are charging businesses. The PPI index continued to decelerate to an annualized (+0.1%) in June, this follows (+0.9%), (+2.1%), and (+2.7%) reported for the prior three months. This is the lowest annualize rate in nearly three years, the high-water mark was set in March 2022 at (+11.7%). Much of the rise in June's final demand prices is attributable to a (+0.2%) increase in the index for final demand services, while the prices for final demand goods was unchanged. A (+5.4%) increase in the index for deposit services was a major factor in the June increase in prices for final demand services. The indexes for food and alcohol retailing, traveler accommodation services, insurance, hospital inpatient care, and airline passenger services all moved higher. Excluding food, energy, and trade services, the so-called core PPI increased (+0.1%) in June. The core PPI continued to decelerate to an annualized (+2.6%) in June, this follows (+2.8%), (+3.3%), and (+3.7%) readings for the prior three months. The high-water mark was set in March 2022 at (+7.1%).