The markets celebrated last week when energy prices fell, and this allowed the inflation rate to decline slightly.
What most people don't realize is that a large part of that decline in energy prices came from the U.S. federal government and it's about to run out.

As of 26 August, the SPR’s holdings, at 450 million barrels, are at their lowest since 1985! It’s declined by 171 million barrels in the last 12 months alone, and it’s going lower in the months ahead.

‘Over the next six months, around 240 million barrels of emergency oil stocks, the equivalent of well over 1 million barrels a day, will be made available to the global market.’

The 31 March announcement called for a release of reserves for six months. That would put the end date for September. But another announcement in July said the releases would continue until the end of October.

By the end of October, it’s estimated that stockpiles of medium sour crude will be just 179 million barrels. To put that into perspective, from June 2021 to October 2022, the US will have likely sold down 180–190 million barrels of medium sour.

In other words, there’s very little firepower left, short of draining the reserve completely.
And guess what happens when you (literally) get to the bottom of the barrel? You need to start filling it up again for when a real emergency occurs.

The Treasury did a study estimating how much impact that had on energy prices.

It is unclear how much of these changes in oil prices were passed through to retail gasoline and diesel prices. In general, we would expect one-for-one passthrough: a $1 per barrel decrease in crude would lower the price of gasoline by $1 per barrel, equal to $0.024 per gallon, since there are 42 gallons of gasoline per barrel. However, recently refining markets have been very tight, and it’s possible that a $1 change in crude oil would not lead to an equal decline in the retail price of gasoline.

This program ends in eight weeks. When that happens energy prices will rise around 35-38 cents a gallon. In addition the federal government will need to buy oil to replace what it had sold, so that should push the price of gas up around roughly 40-45 cents a gallon. Energy prices affect almost everything else.

In related news, natural gas prices in Europe just spiked 30%. This will spill around the world.