Connect with us

Hi, what are you looking for?

Fuel

And now it’s 2013: DOE/EIA diesel price rises to level of 9 years ago

The benchmark diesel price has moved to a level not seen in nine years. 

The latest Department of Energy/Energy Information Administration price is $4.055 a gallon, effective Tuesday. The usual Monday posting was delayed due to Presidents Day. 

The latest price marks an increase of 3.6 cents from the prior week.

It’s the seventh consecutive week that the price used for most fuel surcharges has increased, posting a gain of 44.2 cents a gallon during that time.

Most of the recent increases brought the weekly diesel price back to levels not seen since 2014, when oil prices began a lengthy slide in the latter half of the year. 

But the latest DOE/EIA price now puts the diesel number at a level last seen March 11, 2013, when it was posted at $4.088 a gallon.

Prices on the CME commodity exchange actually have been lower in the past week. After settling Feb. 14 at $2.9618, ultra low sulfur diesel (ULSD) plummeted the next day by more than 10 cents, a rare double-digit drop in the contract. 

That decline was propelled lower by a market that day that was reacting to suggestions that Russia was backing away from an invasion of Ukraine, an obviously incorrect assumption. But prices also fell significantly two days later, and the 3.73-cent increase on CME Tuesday only brought the ULSD price up to a settlement of $2.8188 a gallon, significantly lower than the Valentine’s Day price.

Retail prices lag moves in both commodity markets and wholesale markets, though the pace of that delay is far from fixed. Wholesale diesel prices have followed down to stay on pace with the drop in commodity diesel prices. 

The ULSDR.USA average national wholesale retail price was $3.056 a gallon a week ago, on Feb. 15, but dropped quickly to $2.901 on Friday before rebounding slightly to $2.92 Tuesday. That decline suggests that if markets do not climb higher from here, retail prices have some catching up to do with earlier declines in wholesale levels.  

Counting any barrels that might be impacted by the Russian incursion into eastern Ukraine is not coming up with enough quantity to move the market further. Sanctions imposed by the Biden administration Tuesday do not include oil, but international tension is almost always bullish for oil.

And looming in the background are reports that talks between Western countries and Iran over easing sanctions are heading toward a resolution. The decline in Iranian production following the renewed imposition of sanctions by the Trump administration has been significant. In 2017, Iranian oil production topped 3.8 million barrels per day at times. At the start of 2021, it was down to slightly more than 2 million barrels a day but has risen to 2.45 million more recently. 

“European and Russian diplomats agreed that negotiations over Iran’s nuclear program have reached the endgame, signaling potential relief for global energy markets if sides can agree to settle final differences,” Bloomberg reported. “Any restoration of Iranian barrels to the global market would help ease tightness as OPEC and its allies struggle to meet its output goals.”

Public-sector efforts to boost truck parking face path filled with hurdles

Drilling Deep: Diving into the truck parking squeeze

In the ATRI Top 10 list, some big differences between drivers and management