Interactive Brokers Senior Economist Shares The Oil Price That Finally Breaks The American Consumer

Interactive Brokers senior economist Jose Torres has warned that oil prices reaching $120 a barrel could break American consumer spending. This threshold is 20% above the current price of WTI crude. The national average price of regular gasoline jumped 16 cents to $4.32 a gallon on September 14, 2026, pushing it to the 90th percentile of the past year and marking a 7.8% increase in one month.

The proximate cause is the surge in WTI crude to $97.26 a barrel on September 9, after rising 16.1% in a month. Brent has also traded through the $100 line. Torres' threshold, though not a forecast, is a specific number in a debate that typically relies on speculation. The last time WTI reached this neighborhood was in June 2022 at $114.84, following a summer that saw the fastest tightening cycle in forty years.

The household savings rate has decreased to 2.8% in Q2 2026, down from 6.2% in Q1 2024, and consumer sentiment sits at 55.2, well below the recessionary threshold. Credit card APRs are also high at 20.94%. Gasoline spending in the national accounts has risen from $401.7 billion in July 2025 to $490.4 billion in July 2026, representing an approximately $90 billion reduction in pre-tax income.