Marketplace - Gas prices will probably go up this summer

Episode Date: June 11, 2026

Hate to be the bearer of bad news, but all three economists we asked say gas prices are due for another hike this summer. The war in Iran continues to drain oil reserves in the U.S. and abroad, and eventually prices will have to match growing supply-demand tension. (Yes, that’s even if the war ends today.) Also in this episode: Bond investors expect inflation to stick around for a while, a trio of upcoming IPOs will barely put a dent in total market cap, and Kansas City short-term rental demand disappoints as World Cup kicks off.Every story has an economic angle. Want some in your inbox? Subscribe to our daily or weekly newsletter.Marketplace is more than a radio show. Check out our original reporting and financial literacy content at marketplace.org — and consider making an investment in our future.

I don't want to alarm anybody, but have you seen prices lately? From American public media. This is Marketplace. In Los Angeles, I'm Kyle. It is Thursday today. This one is the 11th of June. Good as it always is to have you along, everybody. So, here's what's happened in the oil markets the past couple of days.

There was talk of a peace agreement in the war and oil prices went down. Then they were shooting and oil prices went down. down. Then there was a president saying he was going to bomb Iran hard and oil prices went down. And then the president said the bombing is off and here we are. Oil prices are down. Part of why is that the United States has been drawing down its commercial and strategic oil reserves. Crude inventories fell another 7.2 million barrels this week. That brings the drawdown, Reuters says, to almost 80 million barrels since the war started. There are, yes, still hundreds of millions of barrels left, but inventories can only get so low.

before the supply chain starts to break down. Traders might not care about the geopolitics, but they are sure going to care about the logistics. Marketplace of Kaylee Wells gets us going. Out of all those barrels in our oil inventories, a lot of them just aren't accessible. You think about a large storage tank, there's always going to be some oil at the bottom that can't be pumped out.

Aaron Brady with S&P Global Energy says there's also the oil that keeps pipes lubricated and storage cavern safely intact. So he estimates that roughly, roughly 290 million of the 426 million barrels of oil now in the U.S. inventory won't actually get used or sold. And at the current drawdown rate? Sometime in July is my best guess is when we get into that danger zone, where we get close to those minimum operating levels. And even if the war ended today, it takes a couple months to

get the global supply chain back up and running normally. The hardest part, I think, is that it does not feel like we're close to a situation where things start to move back toward normal. Dan Pickering is founder and chief investment officer of Pickering Energy Partners. And he says as countries deplete their reserves, oil prices have been deceptively not bad. Folks are like, well, what do I need to worry about? The issue is every single day that market's tightening. And when you get to the point where it's obvious that there's an issue, it's very hard to fix. Now, the U.S. is in a very different position than it was the last time it was, flirting with oil supply problems in the 1970s, says Hugh Daigle,

professor of petroleum engineering at the University of Texas at Austin. When you had things like big lines of gas stations, gasoline rationing, reduction of national speed limits to 55 miles an hour, I mean, those are pretty drastic measures. Today, he says it's more of a slow-moving crisis, and the main threat to consumers is a drastic change in price. As we keep drawing down the reserve, you're really limiting your ability to be able to to further control the prices that people are paying for refined products.

Which is why all three analysts say oil prices will rise this summer. Dan Pickering says it could go up anywhere from 20 to 50% higher. I'm Kaylee Wells for Marketplace. Wall Street on this Thursday, tell you what, equity traders sure did like the geopolitical news oh, the day. We will have the details when we do the numbers. The thing about this economy right now is, that we are borrowing a lot of money, like way more than we have in the past.

So the Treasury Department has been auctioning off a lot of long-term government debt this week, 30-year bonds today, about you 10 years on Wednesday, which means we know what yield, which is to say what interest rate investors are demanding in exchange for lending the government money for years or even decades. Marketplace's Justin Ho explains what that means for where this economy might be going. U.S. Treasuries are the gold standard for government debt. investors from around the world always show up the treasury auctions to load up on bonds. But every time, the question is how much yield are they going to demand for their money?

It all comes back down to compensation. Are you going to get compensated for owning a security above the inflationary expectations? That's Lawrence Gillum, Chief Fixed Income Strategist with LPL Financial. He says investors are worried that prices will keep rising over the next few years and eat up whatever interest they get on those bonds. So the higher the inflation, the lower your actual... Call it real return that you're going to get from the fixed income markets. As a result, investors have been demanding higher yields on short-term government debt.

Yields on two-year treasuries have risen more than a full percentage point since the war started. Zachary Griffiths, with credit sites, says that's because investors expect the Federal Reserve to tamp down inflation by hiking interest rates. That is a truly dramatic shift from what we saw at the start of the year, and that's driven by inflation concerns. But yields on long-term government debt, as in 10 and 30. 30-year bonds haven't risen so quickly. Griffith says one reason is because rate hikes have long-term consequences. A higher policy rate environment in the near term that does increase the

risk that you have a more notable downturn in economic growth from the 10-year perspective versus a two-year perspective. Another factor that's keeping a lid on long-term yields is the expectation that the Strait of Hormuz will eventually open again. John Canavan is lead market analyst at Oxford Economics. It's a question of time. It's a question of when, but the broad consensus is certainly that's what's going to happen. Kenovan says when it does, inflation will cool. And that optimism among market participants that that will happen has also limited the extent of the rise in long-term yields. But Canavan says there are still some big factors that will push long-term yields higher, namely the national debt. Longer term, the drumbeat of deficit risk.

will just continue to grow louder and louder in the background. And that will put more upward pressure on long-term rates, even after inflation concerns go away. I'm Justin Howe for Marketplace. We're going to start this next piece with some audio. It is unbelievable. It's nice to see IPOs getting so much attention. We got some hits coming up this summer. It's kind of hard to ignore it.

It's like everywhere right now. That's Michelle Lowry at Drexel University. Terrence O'Dine at UC Berkeley and Suha Shrutheran at Emory. And what they're talking about, had you missed the news, are the three massive initial public offerings planned for this summer. SpaceX starts trading tomorrow on the NASDAQ, ticker symbol SPCX, should you be curious? It will be, as you know, the biggest IPO on record nearly $2 trillion. Anthropic filed to go public June the first.

OpenAI filed this past Monday. Each of the three likely to raise tens of billions of dollars. many tens. And that's going to put a whole lot of equity into the stock market in a very short period of time. Here's Drexel's Michelle Lowry. At some point, it is hard to really understand when there are so many zeros on these numbers. Fact check, true. On the one hand, we can look at the numbers and we can say, wow, in aggregate, these companies might raise $200, $250 billion. That's an enormous amount of money. Wow, indeed. But.

However, if we instead look at it as a percent of total market capitalization, you're talking maybe 0.5 percent, maybe even less. Total capitalization of U.S. stock markets all in now, $70 trillion, which means as big as they are and they are big, these three offerings are only going to make up a few tenths of one percent. And that's actually a lower percent than what we had back in the 80s and 90s. It's not a huge amount of the current market. Not a huge amount, but definitely huge interest. And Suha Srirrelaan at Emory points out that a lot of the retail investors who are buying into these IPOs are going to once they go public. They are already big tech friendly. It's your NVIDias.

It's your even like Google, Alphabet, Amazon, right? Like companies in the tech sector. Word to the wise, by the way. Do not expect SpaceX to start. trading right at the opening bell tomorrow. It's going to take the NASDAQ a good couple hours, like a long couple hours, to get things organized. The World Cup started today in Mexico City, Mexico 2-0 over South Africa. It'll be 39 days, 16 cities in Mexico, Canada, and the United States.

We did a story back in December about the smallest of those cities, Kansas City, Missouri, where there was talk that there weren't nearly enough hotel rooms. for the hundreds of thousands of fans that were expected to visit, and as these things tend to go, some homeowners and developers were hoping to rent their places out and get a piece of the action. Now, though, as the tournament begins, the market for short-term rentals in Kansas City is more of a mixed bag, as Marketplace's Henry App reports. Lily Stork admits she was a bit late to the game. At first, she was reluctant to list her family's five-bedroom Kansas City home during the World Cup,

but then she started hearing how some other homeowners were charging thousands of of dollars a night for their places. We thought we kind of have this really wonderful space that's closer than anything else we've seen to where the games are going to be. And so we thought we can't really pass it up. Her house even has an indoor pool. So in March, she and her husband paid a property manager to list it at $5,500 a night. We've had thousands of inquiries, but no bites.

That's not the situation Kansas Cityans were expecting just a few months ago. The local tourism bureau Visit KC had projected the World Cup would bring 650,000 visitors, 10 times the number of hotel rooms in the region, says Susan Brown, president of the Kansas City Short-Term Rental Alliance. We were worried in the beginning, will they be sleeping on the streets? Where will they stay? So Brown's organization and municipal officials pushed to get more people to offer up their homes for rent. The city reduced its registration fees for short-term rentals. Brown's group held training sessions for prospective hosts who wanted to make money from the influx of soccer fans. Everybody wished in, opened up their homes, hoping to get a piece of that.

And then what that does, it's just an economics lesson, supply and demand. As in the supply of Airbnb's and Verbo's outpaced demand. That's held prices down, Brown says, and left a mixed bag for property owner. You might get lucky, you might get that booking or you might not. Overall, short-term rental bookings are up in the area, 47% higher than the same time last year, according to AirDNA, a site that tracks global short-term rental data. Rates are up to 65% compared to last year. And yet, Jamie Lane, chief economist at AirDNA, says there are still a lot of available places in the region.

Demand can be really strong, while overall occupancy, seems a bit weak, given all that demand, because of the massive increase in listings into that market. Some would be hosts in Kansas City have thrown in the towel. We knew by January, like that maybe the World Cup thing wasn't going to quite be the boon. Back in 2024, Roxanna Chaffay and her husband bought a townhouse. They wanted to get some short-term hosting experience before renting it out during the World Cup. Months went by, the place wasn't getting booked, and then some folks who just rented it asked if they could buy it. Chaffay ran the offer by her husband. So I texted him and he immediately shot back with yes. Not let's talk about it,

not let's think about just immediately yes. They closed in late February for just over $300,000, which was about what Chaffay says they paid for it. Ultimately, she says, moving on was for the best. We never got a single World Cup booking up until we closed. For homeowners still waiting for bookings, there is some time. Visit KC., the Regional Tourism Bureau, confirmed that it still expects 650,000 visitors over the next few weeks, but it declined an interview request. And the last two matches in Kansas City are in the later stages of the tournament. We won't know which teams are playing for a few more weeks. So for now, Lily Stork is keeping her listing on.

in preparing to potentially move her family of four kids to her parents' house on short notice. If for some reason we got a bite, we would have to scramble, but we would, we would do it. And she's dropped the price of her place, from $5,500 a night, now down to about 2000. I'm Henriette for Marketplace. Coming up. I'd be like trying to make a birthday cake, and there'd be somebody standing there with their dog to be seen. You never know when duty's going to call, huh? First, though, let's do the numbers.

Dow Industrial's up 929 points today, 1 and 9 tenth of 1% 50,000 to 848. The NASDAQ gained 640 points, 2.5%. 25,809, S&P 500 added 127 points, 1 and 3 quarters percent, 73 and 94. SpaceX's sticker symbol, as we said, SPCX. One letter away from SPCE, which is the same. symbol for another space company, Virgin Galactic. Reuters reports users of the Reddit forum Wall Street bets have been saying

they were buying SPE, banking that that stock is getting in a lift from people confusing it with SPCX. Yeah! SPCE today, up 21 and 6 tenths percent. You're listening to Marketplace. This is Marketplace. I'm Kyle Risdahl. It has been a week of

inflation data. The consumer price index yesterday, 4.2%. The producer price index today, 6.5.5.7. to half percent year on year. That's the highest it's been since November of 2022. We're going to talk things over with Karen McDaniel. She teaches economics at Arizona State University. Professor McDaniel, good to have you on. Thank you. So let me break the fourth wall here. You said before we actually turn on the microphones, you love price indexes. Why is that so? They're a lot of fun. You take a lot of different prices and the further down you drill into them, the more information you can find about what's going on

price-wise in the economy. All right, we're going to do some light drilling, not too far down. But do me a favor and take yesterday's CPI and today's PPI. That's a lot of initials I know. I apologize to the listeners. And put yourself in the mindset of not somebody who's trying to look at this stuff like you are, but somebody just reading the headlines and knowing the gas is expensive and food's up too. And holy cow, does this mean that just prices are going to keep going up?

Well, I would say that the producer price index is often used as an indicator for the consumer price index, but the consumer price index includes some different things. So one big component of the consumer price index is owner's equivalent rent. That's about a quarter of it, and it's not included in the producer price index. Imports are also not included in the producer price index. but the producer price index includes the prices that domestic producers receive for their goods. And those prices are up. Now, we probably will expect consumer prices will continue to rise.

But the relationship between the two is not perfect. Okay. Now, play this out like, I don't know, six months. And tell me where you sit on the whole being able to look through the energy shock, right? I mean, that's what Powell has said. Kevin Warsh may say something like that next week. I don't know. That, in essence, without saying the word transitory, that's what they're saying.

Well, in order for these numbers to continue to be high, that means prices have to continue to rise. Right now today, prices for gasoline are maybe a little bit lower than they were the month before. what's going to happen next month and the month after, there's a lot of geopolitical stuff that's going to go into that. But in order for those inflation numbers to continue to be high, then prices have to continue to rise. So I think that's what I would interpret as looking through prices are high now. We kind of know why. For the inflation rate to be sticky, they have to continue to rise. And they have to bleed from energy into, other goods and services.

Which is kind of happening, right? I mean, energies and everything. It's in trucking. It's in, you know, fruit packaging. I mean, it's in the whole smash. Yes, it is. And, you know, if the labor markets are tight enough that workers have negotiating power and can negotiate higher wages, then we'll continue to see prices rise or inflation numbers

be high. Right. Let me ask you, if I might, about inflation expectations because, you know, as we know, what consumers think is going to happen can actually affect what kind of does happen. Is there a reason now to think that inflation expectations are still anchored, or are you tending toward the, hmm, we'll see what happens with inflation expectations with these numbers. I'm in a hmm camp. I, there's a lot that's going on.

We've got the energy shock. We've got high demand for energy and investment fueling our AI boom. These are interesting times. Yes, they are. I think there's a curse that goes along those lines. Karen McDaniel, she's at Arizona State. Professor McDaniel, thanks so much for your time. Thank you.

Challenges in getting good health care, it turns out, are not unique to humankind. Rural America's got an animal problem in that there just aren't enough veterinarians to go around. Vet school is expensive and you just don't make as much taking care of animals out in the countryside. It is a problem that shows up in almost every state. A quick glance at federal data shows southern Indiana urgently, needs livestock and poultry vets. Apparently all of West Virginia is in need, and other rural areas are hanging on with one veterinarian doing a little bit of everything. Marketplace's Caitlin Tan takes us to a tiny Wyoming ranching town. Off Main Street in Big Piney, Wyoming, next to a hayfield is Dr. Bob Byerman's vet clinic.

Inside, the animals are talking. A lady holds an old chihuahua. A horse trailer pulls up outside. You didn't know Big Piny had a zoo. This is it? This is it. Beyrman breaks from the interview to advise the owner of Tip, the chunky cat. So, yeah, I don't want to see her any heavier.

Beirman is tall with a thick mustache, and he runs the only brick-and-mortar clinic in the area. People drive two hours to see him, and sometimes he drives to them. especially during spring calving season. I got two C-sections under my belt so far this year. One was in the middle of the night. He'll vaccinate those baby cows later on and screen them for disease, a critical step for the meat we eat, so we don't get sick. This is all a lot of work.

Byerman is 71, and he's trying to retire. The practice is listed, so I had a couple nibbles. But it's got to be the right person who wants to come to this. This being the middle of nowhere. Big Piney is in the western part of the state and is 100 miles from a Walmart. And restaurants, forget about it. Well, we only have one. No, we have two sit-down restaurants now.

Perhaps you can get past that, but then there's the money factor. A vet in Wyoming makes on average $70,000 less per year than one in California. And Byerman's wife, Janet, says a rural vet rarely gets a break. Yeah, always. Always Christmas. Almost every single holiday, we end up taking some calls. They started the business in 1990, and she taught herself how to keep the books. We couldn't find a place, and so we had the vet clinic in the basement of our teeny tiny house. All while raising two kids.

I'd be like trying to make a birthday cake, and there'd be somebody standing there with their dog to be seen, whatever. They lived paycheck to paycheck for a long time. Things eventually got easier as they built up a long. loyal ranching clientele. A lot of people say, how do you make a living in a town of a thousand people? Well, that's because we have several thousand cows here, too. It's the lifestyle. And Byrman is trying to peak young people's interest.

He offers internships like to Onica St. George, who was lured away from Seattle. I was in the big city, and it was just so overwhelming. And I, I don't know, I realized that I wanted to be in a rural area, working with animals. She plans to go to vet school, but it's expensive. The average student debt is $200,000. If I work in these rural areas, will I be able to pay out the debt that I'm going to have to incur from school? St. George is betting on help. The federal government recently increased how much it'll pay off on student loans in trade for rural vet work.

Wyoming just approved something similar. For Byerman, help can't come soon enough. It's four years of vet school, so it takes a while before those kids. kids are out in the workforce. So in the meantime? We got an appointment in there right now. Byerman will keep vaccinating, calving, medicating, and stitching up animals. That should be pretty numbed up.

Like this paint horse named Scarlet. These kind of horses get cancerous tumors. So now we're just going to put a couple stitches in there. All stitched up, the horse walks out. Okay, and just head out that door. Sure. There goes. Environment's off to the next critter.

In Big Piney, Wyoming, I'm Keatlin Tan for Marketplace. This final note on the way out today, a slice of the president's war with Iran that's getting short shrift, IMHO. Inflation gets all the headlines, but there's an economic growth thing going on here, too. The World Bank said today that global economic growth is on track to be the weakest it's been since the pandemic. Best case, we're looking at two and a half percent growth this year. It was 2.9% last year. Worst case, 1.3%. Our daily production team includes Andy Corbin, Maria Holland Horse, Sarah Leeson, Sean McHenry, and Sophia Terenzio.

Willstorri is the supervising senior producer, and I'm Kai Rizdaul. We will see you tomorrow, everybody. This is APM. Start your day with Marketplace Morning Report and me, Kimberly Adams. In 10 minutes or less, I'll explain the day's economic news, why it matters, and what it means for the way you live and work. Tune in each weekday morning for independent, award-winning journalism that brings clarity to the economy. Listen to Marketplace Morning Report on your favorite podcast app.