February Producer Price Index, or PPI for February 2010 came in at -0.6%.

The Producer Price Index for Finished Goods declined 0.6 percent in February, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. This decrease followed a 1.4 percent advance in January and a 0.4-percent increase in December. At the earlier stages of processing, prices received by producers of intermediate goods moved up 0.1 percent and the crude goods index fell 3.5 percent. On an unadjusted basis, prices for finished goods advanced 4.4 percent for the 12 months ended February 2010, their fourth consecutive 12-month increase.

Just as last month's PPI story was all about oil, so is this month, but it dropped, -8.7%, resulting in a crude energy drop of -6.4%. Diesel fuel dropped -8.1%. Gas dropped -7.4%, home heating oil dropped -5.6%.

Here is something to amplify considering the nutritional issues in the United States, fresh and dry vegetables rose 5.3% in February, yet fruit dropped -12.9%. Considering how many people are on food stamps and desperate, one of the most nutritional items getting even more expensive is just plain not a good thing. Basic organic chemicals also jumped 7.4% for February.

So, what's the message? Well, while most reading the PPI will claim all is well, as one can see how much energy affects PPI and CPI, I'd like to point to this story on how crude oil inventories are way down and also how the rest of the world is grabbing supply (read China).

Crude oil rose above $82 a barrel after the Energy Department reported U.S. imports fell to a seasonal low and fuel inventories dropped.

“Imports are down to a really, really small trickle,” said Carl Larry, president of Oil Outlooks & Opinions LLC in Houston. “We’re not able to bring in as much oil as we’d like to because the oil that is out there is going elsewhere. When the economy does start to grow and the refineries start to pick up runs, that crude isn’t going to be there.”