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Jeff Currie Warns Odds Of $5 Gas By Midterms Are "Extremely High"
Veteran commodities strategist Jeff Currie has spent the summer warning that scarcity in physical commodity markets is becoming a persistent source of inflationary pressure and giving way to a commodities supercycle.
After appearing on CNBC on Thursday, he joined Bloomberg Television on Friday morning to amp up that message, warning that tightening crude products supplies make $5-a-gallon US gasoline highly likely by November.
"Crude is the signal, and now we think about products ... they are the noise," Currie said.
Currie, the founder and chief executive of Real Macro and former Goldman commodities head, also warned that scarcity and currency debasement were driving the next phase of the energy shock, with shortages spreading from refined products into crude oil.
Currie described the probability of average US gasoline prices reaching $5 a gallon by the midterm elections as "extremely high."
Currie warned that refiners shifting production between diesel and gasoline would eventually exhaust their operational flexibility, limiting their ability to relieve shortages. US diesel prices could reach $7 to $9 a gallon, he added.
The latest AAA data show the national average price of diesel in the US has topped $6 a gallon.
US Diesel Crack Spread
Morning coverage:
- Brent Nears $110 Then Tumbles On IEA Demand Destruction Warning As Houthis Threaten Saudi Oil Escape Route, Diesel Shock Goes Global
- Huge Fire Along Saudi 'Hormuz Bypass' East-West Oil Pipeline After Alleged Houthi Strikes
Commodities coverage:
Got physical?
Jeff Currie Featured on CNBC TVFormer Goldman Sachs commodities chief and current Real Macro head Jeff Currie joined CNBC earlier Thursday to discuss all things commodities, warning that the latest Brent crude rally above $107 a barrel is becoming harder to dismiss as a temporary shock, with renewed Chinese buying and soaring refining margins (US diesel crack spread now $110 a barrel) signaling deeper pressure across physical commodity markets.
Currie warned that traders are underestimating an inflation cycle driven by years of underinvestment in the capacity to produce and deliver essential raw materials, echoing his summer warnings about scarcity in physical markets.
"The old economy is taking its revenge," Currie said. "You see it in the rates markets. You see it in the commodity markets."
Asked whether the latest flare-up in the Gulf conflict explained the jump in Brent crude this week, Currie pointed first to demand returning from Asia (read here).
"Actually, I put a bigger weight on China coming back to the market," he said, citing strong buying interest after returning from Singapore and Hong Kong.
China had contributed to the refined-product squeeze by reducing refinery operations and exports as access to crude tightened earlier this summer, Currie explained. But exceptionally high diesel margins created a massive incentive to restart those refineries, bringing renewed crude demand into an already strained market.
He cited diesel crack spreads of $110 a barrel, exceeding the price of crude itself. That figure refers to the refining spread, rather than the outright diesel price.
"That's a pretty big profit," Currie said. "They start chasing it, brought those refineries back online, and it was just like an earthquake going through here."
The rally in Brent is showing signs of greater staying power, he pointed out, with equities and longer-dated oil prices beginning to reflect a more persistent disruption.
"People are starting to go, 'This is not transient,'" Currie said. "It has a different flavor to it."
Thank you to @KellyCNBC and the @CNBCTheExchange team for having me on today.
The old economy is taking its revenge.
We are dealing with higher structural inflation after years of underinvestment in the ability to supply and deliver hard assets.
There are two trades happening…
Complementing Currie's bull thesis on commodities, HSBC chief economist for global commodities Paul Bloxh warned in a note this week that a "super-squeeze" has begun (read report).
Tyler Durden Fri, 09/11/2026 - 09:40MbS Begs Trump For Bigger Anti-Houthi Intervention, As Over 100 US Advisers On Ground
We've been documenting the Houthi rapid advance along Yemen's western coast, as the Iran-aligned rebel group closes in on owning more vital Red Sea chokepoint coastal real estate.
As of Friday, after having the day prior entered the strategic port of Mocha, it is being widely reported including in Al Jazeera that the Houthis have taken control of Yemen's entire Red Sea coastline. This gives the group, and by extension Tehran, immensely greater leverage over the Bab al-Mandab Strait and vital global energy chokepoint.
Earlier this week Ansar Allah attacked four Saudi cities, including Aramco sites across southern KSA.The Saudis are said to be in a panic as the front lines of the Sanaa-based government they've long backed and weaponized collapse. In some cases Saudi coalition fighters are simply abandoning their armored vehicles and convoys.
Seeking more Washington support from the air and on the ground, Saudi Crown Prince Mohammed bin Salman (MbS) has already made two urgent phone calls to President Trump.
Axios is reporting that in the Thursday calls MbS urged his American counterpart to launch strikes against the Houthis before they solidify control of the vital Red Sea chokepoint.
The report indicates that "Trump declined, and US officials stressed the administration has no plans to intervene directly against the Houthis for now."
But also, "Adm. Brad Cooper, the commander of U.S. Central Command, traveled to Saudi Arabia on Thursday for urgent coordination meetings, two sources with knowledge of the matter said." So the Iran war is has now officially gone regional.
I'd like to extend my heartfelt thanks to the American taxpayer for their generous and apparently ongoing sponsorship of Ansar's expanding toy collection. Your contributions are greatly appreciated. pic.twitter.com/GHVGHExmaI
— روني الدنماركي (@aldnmarki) September 10, 2026Of course, Washington and Riyadh been through all of this before but to no effect, given the brutal air war and intermittent ground campaign of the Saudi-UAE-US coalition in Yemen from 2015 to 2022. In more recent years amid the Gaza conflict, major US Navy actions in the Red Sea did nothing to push back the Houthi threat. Repeat Israeli bombings have also done little.
But the Pentagon is still intervening in what can be called a long-running proxy war in southern Arabia, as CNN reported Thursday that over 100 US military advisers are on the ground in Saudi Arabia assisting Riyadh with intelligence and targeting support.
One unnamed official even put the number at more around 200, as part of a new Yemen-focused task force amid the ongoing escalation. A huge worry remains the safety of Hormuz crude transit 'bypass' routes.
New Houthi military announcement via Telegram:
Yemen’s armed forces say maritime navigation is safe for all companies except Saudi vessels, which are subject to a blockade, and vow to continue striking Saudi troop buildups and escalating until the aggression and blockade on Yemen end.
The big news overnight was a report that Ansar Allah claimed to have hit Saudi Arabia's East-West pipeline, which feeds an export terminal on the Red Sea and effectively bypasses the Hormuz chokepoint.
Sometimes a short clip says more than pages of analysis. Here, a Houthi commander who was previously detained by government forces explains why the Bab el-Mandeb Strait matters so much strategically. He tells his soldiers that they no longer need drones or missiles. They could… pic.twitter.com/ZpxHOjfGpJ
— Basha باشا (@BashaReport) September 11, 2026The Gulf crisis shows no signs of slowing as US forces took out several Iranian tankers this week and Tehran warns of further escalation. But Trump doesn't appear to be any closer to articulating, much less seriously contemplating, an offramp to this war of his own making - which is also becoming increasingly unpopular at home.
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UK Prime Minister Burnham Rejects Calls For National Data-Center Moratorium
Authored by Matthew Gooding via Data Centre Dynamics,
UK Prime Minister Andy Burnham has ruled out a national moratorium on data centers.
Speaking in the UK parliament on Wednesday, Burnham said the government's AI Growth Zone scheme would help ensure communities hosting new data centers would feel the economic benefits of developments.
Responding to a question from Labour MP Ian Lavery, who said three "vast" AI data centers are currently under construction in his constituency, Blyth and Ashington in north-east England, Burnham said: "At this point, I won't go as far as a moratorium."
He added that data centers "can be the magnet that clusters in other investment over time," and said AI Growth Zones would help boost tax revenues for communities with data centers.
Burnham plans to devolve more power to local mayors, including allowing them to spend a greater proportion of tax raised in their areas on local projects.
Under Burnham's predecessor, Keir Starmer, the UK government championed data centers as a vehicle for economic growth.
It set up AI Growth Zones as a way to attract digital infrastructure projects to specific areas, touting tax incentives and priority access to power.
Blyth and Ashington, Lavery's constituency, is home to major projects including a £10 billion ($13bn) plan to convert a former power station into a 720MW AI data center, which is being developed by Blackstone-owned QTS.
A lot has changed in the past year and a half, with Starmer out and the Department for Science, Innovation, and Technology (DSIT), which oversaw the launch of AI Growth Zones, closed and merged into the Department for Business, Innovation, Science and Trade when Burnham took office this summer.
After a period of uncertainty about the future of the growth zone program, government officials confirmed to DCD that the team now reports to UK AI minister Kanishka Narayan. However, the architect of the scheme, Matt Clifford, has left his role in government to join AI lab Anthropic.
Burnham's backing of data centers contrasts with the stance of UK Green Party leader Zack Polanski, who has called for a national moratorium citing concerns over power and water usage.
In Scotland, lawmakers in the Scottish National Party and the Scottish Green Party have also backed a ban north of the border.
Tyler Durden Fri, 09/11/2026 - 09:20