GITT: Week 12 – Energy Cools, but the Pressure Gap Remains Open
This update follows the GITT framework and the Week 11 reading, where Energy rebounded after the W10 cooling move, the Constraint Index remained above Inputs, and the official consumer-price revision confirmed that the Pressure Gap was wider than previously displayed.
Week 12 changed the surface picture. Energy cooled more clearly, with crude, gasoline, diesel, and TTF all moving lower, while LNG/JKM was essentially flat. However, the deeper structure did not normalize. Inputs remained steady, PMI Input Costs rose again, and the Constraint Index stayed elevated above the Inputs layer.
The message is straightforward: W12 showed cooling at the shock layer, but not systemic relief.
I. W12 Data Update
All values remain indexed to 100 = February 2026 average.
Week 1 = March 1 – March 7.
Week 12 = May 16 – May 22.
Market-based indicators are updated using weekly averages, while official and macroeconomic indicators are updated only when new releases become available. The market layers can move immediately, while FAO, PMI, and CPI series adjust in steps as official data is published.
Energy Layer
| Metric | Region | W0 | W3 | W5 | W7 | W8 | W9 | W10 | W11 | W12 |
|---|---|---|---|---|---|---|---|---|---|---|
| WTI Crude Oil (S) | Global | 100 | 124 | 154 | 148 | 150 | 164 | 154 | 157 | 150 |
| Gasoline (S) | US | 100 | 116 | 140 | 134 | 138 | 151 | 144 | 144 | 136 |
| Diesel (S) | US | 100 | 118 | 171 | 151 | 158 | 166 | 156 | 156 | 150 |
| Natural Gas (TTF) (S) | Europe | 100 | 152 | 188 | 155 | 162 | 165 | 143 | 150 | 145 |
| LNG (JKM) (S) | Asia | 100 | 136 | 191 | 145 | 152 | 155 | 155 | 156 | 156 |
Inputs Layer
| Metric | W0 | W3 | W5 | W7 | W8 | W9 | W10 | W11 | W12 |
|---|---|---|---|---|---|---|---|---|---|
| Fertilizer Index (B) | 100 | 103 | 104 | 108 | 111 | 116 | 115 | 114 | 115 |
| Petrochemicals Index (B) | 100 | 118 | 138 | 132 | 140 | 144 | 140 | 138 | 135 |
| Agricultural Commodities Index (B) | 100 | 104 | 110 | 114 | 118 | 124 | 122 | 123 | 124 |
Constraint Signals
| Metric | W0 | W3 | W5 | W7 | W8 | W9 | W10 | W11 | W12 |
|---|---|---|---|---|---|---|---|---|---|
| Sulfur Index (B) | 100 | 114 | 123 | 141 | 148 | 154 | 149 | 145 | 141 |
| Aluminum (S) | 100 | 108 | 116 | 129 | 136 | 134 | 135 | 138 | 141 |
| Constraint Index (B) | 100 | 111 | 119.5 | 135 | 142 | 144 | 142 | 142 | 141 |
Lagging Confirmation
| Metric | W0 | W3 | W5 | W7 | W8 | W9 | W10 | W11 | W12 |
|---|---|---|---|---|---|---|---|---|---|
| FAO Index (C) | 100 | 100 | 102.4 | 102.4 | 102.4 | 102.4 | 104.1 | 104.1 | 104.1 |
Transmission Layer — Revised Official Consumer-Price Series
| Metric | W0 | W3 | W5 | W7 | W8 | W9 | W10 | W11 | W12 |
|---|---|---|---|---|---|---|---|---|---|
| PMI Input Costs (L) | 100 | 100 | 116 | 116 | 122 | 122 | 124 | 124 | 126 |
| Food CPI (US) (C) | 100 | 100 | 100.0 | 100.0 | 100.0 | 100.0 | 100.0 | 100.5 | 100.5 |
| Food CPI (EU) (C) | 100 | 100 | 100.1e | 100.1 | 100.1 | 100.6e | 100.6e | 100.6e | 100.6 |
| Food CPI (JP+KR) (B) | 100 | 100 | 99.5 | 99.5 | 99.4 | 99.4 | 99.0 | 99.0 | 98.9 |
e = flash / estimate-based euro-area reading at the time of the earlier weekly update.
II. What Changed in W12 — and What It Means
W12 delivered the clearest Energy cooling since the W9 peak. WTI declined from 157 to 150, Gasoline moved from 144 to 136, Diesel eased from 156 to 150, and TTF declined from 150 to 145. LNG/JKM was essentially unchanged at 156. As a result, the Energy layer fell from roughly 153 in W11 to about 147 in W12.
That supports the IMF-style gradual absorption scenario at the surface level. However, the rest of the framework did not confirm a clean normalization move. Inputs stayed near 125, with Fertilizers slightly higher, Petrochemicals lower, and Agricultural Commodities higher. This means the conversion layer did not break down alongside Energy.
The Constraint Index also remained elevated, slipping only from 142 to 141. The proxy Sulfur Index cooled, but Aluminum strengthened from 138 to 141, keeping the broader constraint signal firm. Most importantly, the Constraint Index stayed well above Inputs. That means the physical-constraint phase remains intact.
The strongest W12 confirmation came from PMI Input Costs, which rose from 124 to 126. This is the key contradiction in the week: the front-end Energy layer cooled, but business-level cost pressure increased. At the same time, the consumer-price layer remained near the February baseline. The Pressure Gap therefore remains open.
W12 was not a renewed shock week. But it was not a normalization week either. It was a late-transmission week: Energy cooled, while Inputs, PMI, and Constraint signals continued to show that prior pressure remains embedded in the system.
III. Direct Sulfur Market — Methodology Watch
The direct sulfur market remains a critical external confirmation signal. The latest clean public direct-sulfur figures still point to severe stress: Sulfuric Acid CFR US Gulf was assessed near $400/mt in early May versus $155/mt in late February, CFR Brazil sulfur near $1,150/mt versus roughly $525/mt pre-war, and Solid Sulfur FOB US Gulf near $1,060/mt versus $650/mt when the assessment launched in early April.
I did not find a newer public direct-price update that replaces those figures. However, broader public sulfur tracking remains consistent with extreme stress, with sulfur still near historically elevated levels in May. Reuters has also highlighted sulfur shortages as a meaningful pressure point for downstream industries, including Indonesian nickel processing, which relies heavily on sulfuric acid.
For now, the framework keeps the proxy Sulfur Index unchanged to preserve historical continuity. But if direct sulfur prices remain extreme and a reliable weekly series can be incorporated, future methodology may need to evolve from a proxy-only sulfur measure toward a direct sulfur-market component. That would matter materially: a direct sulfur basket would likely push the Constraint Index above the Energy layer, signaling a possible shift from energy-led transmission to a more explicit constraint-dominant phase.
IV. Forward Path and Key Takeaway
The IMF-style gradual absorption path remains possible, and the weekend oil action gives that scenario more weight. U.S. crude dropped sharply in weekend pricing after reports that Washington and Tehran may be moving toward a peace framework or a 60-day ceasefire extension that could include reopening the Strait of Hormuz. However, this is still a political headline, not yet a confirmed physical-market normalization. Reports also suggest that the deal remains disputed in details, with Iran emphasizing continued control over the Strait even as U.S. officials frame reopening as part of the agreement.
If this weekend move carries into regular trading next week, W13 could become a critical test for the GITT framework. Energy has already cooled from 153 in W11 to 147 in W12. A further decline in crude, gasoline, diesel, and TTF could pull the Energy layer closer to the Constraint Index, which stood at 141 in W12. That would raise the possibility of a major crossover: Energy falling toward or even below Constraint. Such a move would not automatically mean normalization. It could instead mark a transition from an energy-led shock to a constraint-dominant phase, where headline energy prices cool but physical bottlenecks, sulfur stress, aluminum pressure, and business-level input costs remain elevated.
This is why next week matters. If Energy falls and Inputs, PMI, and Constraint signals fall with it, the IMF-style absorption path becomes more credible. But if Energy falls while Inputs stay sticky, PMI continues rising, direct sulfur remains extreme, and the Constraint Index stays elevated, the interpretation changes. The system would no longer be driven mainly by the original oil shock. It would be signaling that the shock has already migrated into the constraint and transmission layers.
The key takeaway is simple: W12 showed clearer Energy cooling, but not systemic relief. Weekend oil pricing suggests W13 may extend that cooling, especially if the ceasefire/Hormuz reopening reports gain credibility. But the decisive signal will not be oil alone. The decisive signal will be whether the rest of the GITT structure follows Energy lower — or whether Energy cools while the constraint layer remains elevated.
Publications
GITT: The Framework and Week 8 (April 24)
GITT: Week 9 – Pressure Rebuilds (May 1)
GITT: Week 10 (May 8)
GITT: Week 11 (May 15)
Gasoline: The Pump Shock Nobody Is Ready For (April 23)
The Architecture of a Global Economic Crisis:
Part 2: The Hidden Layer: Petrochemicals
Part 3: When It Reaches the Real Economy
Part 5: Financial System Impact
Part 6: Early Signals: Stress Already Visible
March 15: Energy Crises – Historical Scale (open article)
March 18: Strait of Hormuz Risk: How a Middle East War Could Trigger a Global Supply Shock
March 19: RAS LAFFAN: GLOBAL ENERGY SHOCK: Part 1
March 19: Dutch TTF – Technical Forecast
March 25: Who Blinks First? The Energy War Reshaping Markets
April 3: ABU DHABI: SYSTEM STRESS EXTENDS: Part 2
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