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Diesel inventories on East Coast tightened again last week

Some price indicators suggest possible relief in sight, though government statistics don’t show it

John Kingston
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Photo: Jim Allen/FreightWaves

(Editor's note: a statement from Pilot FlyingJ has been added.)

The diesel market headed in divergent directions Wednesday, adding to the uncertainty and confusion that buyers have faced now for weeks.

Looming large over trading was the weekly release of statistics from the Energy Information Administration, which showed that inventories of ultra low sulfur diesel (USLD) on the U.S. East Coast, already at close to record-breaking lows, managed to fall yet again.

But at the same time, the price of ULSD on the CME commodity exchange, which had been outpacing the price of crude and gasoline for weeks, rose at a far slower pace than the other members of what is known as the petroleum “complex” on CME.

ULSD on CME rose 1.9 cents a gallon to $3.9512. That was an increase of just 0.48%, which stood in sharp contrast to a 5.77% increase in the price of West Texas Intermediate crude, a 4.93% rise in the price of international crude benchmark Brent and a slightly more than 4% rise in RBOB gasoline, an unfinished gasoline blendstock that serves as the trading proxy for gasoline. 

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    John Kingston

    John has an almost 40-year career covering commodities, most of the time at S&P Global Platts. He created the Dated Brent benchmark, now the world’s most important crude oil marker. He was Director of Oil, Director of News, the editor in chief of Platts Oilgram News and the “talking head” for Platts on numerous media outlets, including CNBC, Fox Business and Canada’s BNN. He covered metals before joining Platts and then spent a year running Platts’ metals business as well. He was awarded the International Association of Energy Economics Award for Excellence in Written Journalism in 2015. In 2010, he won two Corporate Achievement Awards from McGraw-Hill, an extremely rare accomplishment, one for steering coverage of the BP Deepwater Horizon disaster and the other for the launch of a public affairs television show, Platts Energy Week.