The last time the Department of Energy’s Energy Information Administration posted a week-on-week decline in its average retail diesel price, the presidential election of 2020 hadn’t even taken place.
That was Nov. 2, the day before the election. Since then, the weekly number posted by the EIA, which serves as the benchmark for most fuel surcharges, has been up every week, a record run of 20 weeks that easily eclipsed the earlier record of 15 consecutive increases. The 82.2 cents worth of gains over those weeks lifted the price to $3.914 a gallon from $2.372.
But on Monday, the DOE/EIA price was set at $3.161 a gallon, down 3.3 cents from the prior week.
The reaction at the pump was a long time in coming. The ultra low sulfur diesel contract on the CME peaked at $1.9675 a gallon on March 12. Since then, it has declined almost 16 cents, dropping Monday to $1.8098 a gallon. It declined to less than $1.75 a gallon last week before bouncing back.
The wholesale price of diesel as measured by the ULSDR.USA data series in SONAR showed similar movement. That price stood at $2.228 a gallon on March 8 and was $2.109 on Monday. But in the middle of last week, it was $1.96 a gallon.
Oil prices have declined on several factors: a reaction to a market that had climbed rapidly and was seen as due for a correction; a quick rise — lasting no more than a day or two — created by the Suez Canal closure; and a rising dollar, which works to push down oil prices.
Markets this week will be watching a meeting of the OPEC+ group, which includes OPEC members and several key non-OPEC exporters, led by Russia. That group surprised markets last month by choosing not to add additional barrels to the market and to keep in place earlier agreed-to production cuts. Another rollover is expected when the group meets later this week.
One notable aspect to the DOE/EIA price: The California price did post a 21st consecutive increase. It rose to $3.982 a gallon from $3.98. While most of the country uses the national average in calculating fuel surcharges, the unique aspect of the California market and its higher prices means that many carriers out there base their fuel surcharges on the DOE/EIA price for the Golden State.