After four consecutive weeks of decline, the Department of Energy/Energy Information Administration weekly average retail diesel price took a rest.
For the first time since Feb. 11, 2019, the price was unchanged from the prior week. It held steady at $3.124 a gallon.
Since a settlement of $1.89 a gallon on April 14, the price of ultra low sulfur diesel on the CME commodity exchange has been remarkably steady but somewhat weaker, particularly when compared to the volatility of the market since the pandemic began. The ULSD price on CME is the foundational building block for what ultimately becomes the retail price of diesel.
Since the price on that date, the price of ULSD declined to $1.8537 a gallon last Wednesday, a decline of 2.64 cents per gallon that day. Since then it has regained some of that decline, settling Monday at $1.8785. It was the only petroleum contract on the CME — WTI crude, Brent crude and RBOB gasoline — to record a gain for the day.
Markets have been steady, with statistical information not showing any big swings in supply or demand. Prices were weak in early trading Monday on fears that the rising number of COVID-19 cases in India would lead to a decline in consumption from that country. Indian demand is one of the “swing” consumers, in that fluctuations in its consumption of petroleum are considered an important factor in the price of crude and products.
The market’s eyes this week will be on a meeting of the OPEC+ group Wednesday. At that gathering, the ministers from OPEC nations and several non-OPEC exporters including Russia are expected to decide whether to go ahead with an increase in output of 800,000 barrels a day in May as part of its ongoing plan to add 2 million barrels per day of output through June. Supply was being added this month as well.
A report by S&P Global Platts said that a technical committee that advises the ministers said the impact on overall demand from India’s COVID surge could not be determined yet.