• ITVI.USA
    16,030.520
    117.340
    0.7%
  • OTLT.USA
    2.809
    0.016
    0.6%
  • OTRI.USA
    22.220
    -0.080
    -0.4%
  • OTVI.USA
    16,016.550
    115.560
    0.7%
  • TSTOPVRPM.ATLPHL
    2.950
    -0.570
    -16.2%
  • TSTOPVRPM.CHIATL
    3.610
    0.650
    22%
  • TSTOPVRPM.DALLAX
    1.370
    -0.240
    -14.9%
  • TSTOPVRPM.LAXDAL
    3.550
    0.210
    6.3%
  • TSTOPVRPM.PHLCHI
    2.320
    0.220
    10.5%
  • TSTOPVRPM.LAXSEA
    4.110
    0.250
    6.5%
  • WAIT.USA
    126.000
    0.000
    0%
  • ITVI.USA
    16,030.520
    117.340
    0.7%
  • OTLT.USA
    2.809
    0.016
    0.6%
  • OTRI.USA
    22.220
    -0.080
    -0.4%
  • OTVI.USA
    16,016.550
    115.560
    0.7%
  • TSTOPVRPM.ATLPHL
    2.950
    -0.570
    -16.2%
  • TSTOPVRPM.CHIATL
    3.610
    0.650
    22%
  • TSTOPVRPM.DALLAX
    1.370
    -0.240
    -14.9%
  • TSTOPVRPM.LAXDAL
    3.550
    0.210
    6.3%
  • TSTOPVRPM.PHLCHI
    2.320
    0.220
    10.5%
  • TSTOPVRPM.LAXSEA
    4.110
    0.250
    6.5%
  • WAIT.USA
    126.000
    0.000
    0%
News

Weekly DOE/EIA diesel price cracks $3/gallon mark in 17th straight increase

Price decline created by the pandemic now totally erased

The Department of Energy/Energy Information Administration average retail diesel price rose for the 17th consecutive week, adding to its record run of increases and breaking through the
$3-per-gallon mark.

The latest price is $3.072 a gallon, up 9.9 cents.

That increase is the largest increase in the series of increases that goes back to early November. The largest increase had been the 9.7 cents reported last week. The largest one-week increase prior to this run was 15.3 cents, recorded after Hurricane Harvey lashed the Gulf Coast refining sector.

The DOE series goes back to 1994.

It took a little less than 14 months but the price has recovered its pandemic-fueled decline. The first price reported in 2020 was $3.079 a gallon. A week later, prior to the first reports of a previously unknown virus coming out of China, the price dropped slightly to $3.064 a gallon. But as news of the virus started seeping out by mid-January, it was diesel prices and their tie to jet fuel that made it the market to first take it on the chin from that development. The price reported Jan. 20 of last year was $3.037 a gallon. 

Oil markets have been rising for months but have started to pull back. On Monday, even as equity markets soared, the price of U.S. benchmark crude West Texas Intermediate fell 86 cents to settle at $60.64 a barrel on the CME commodity exchange. That’s down almost $3 a barrel in just two trading days.

The decline in diesel markets has been even larger percentage-wise, with the contract for April ultra low sulfur diesel dropping to a settlement of $1.8192 a gallon Monday from a recent high last week of $1.9066. 

Diesel’s decline at a faster rate than crude could be seen as puzzling. Questions remain about the extent of refining outages that linger as a result of the Texas cold snap two weeks ago. S&P Global Platts reported late last week that the “majority” of Texas’ refineries are “in the process of restarting,” with midmonth seen as a return date for them. But that is still a significant amount of lost capacity that by the middle of the month will be three to four weeks in duration, and come at a time when inventories are not seen as excessive, with market spreads suggesting some tightness.

A key market to watch remains the wholesale price of ultra low sulfur diesel in Houston. Tight supplies in that key market as a result of refinery outages will be reflected in that price quickly.  That price on Monday, according to the ULSDR.HOU data series in SONAR, is down 4.7 cents a gallon from its price last Friday of $2.077 a gallon, a level not that far off from the drop in ULSD prices on CME through Friday. That Friday settlement — rather than the trading on Monday — would be the basis for Monday’s wholesale price. Given that, the Houston wholesale price is not swinging far from the CME price at this point. 

But it is the crude market that will have the biggest say on the future direction of prices. A meeting of the OPEC + group — the OPEC nations and a group of non-OPEC oil exporters led by Russia — will meet Thursday. Russia is seen as wanting to put additional crude barrels on to a market that in terms of global crude benchmark Brent has risen almost $45 a barrel from its
April low. Saudi Arabia is recommending a more cautious approach, according to media reports about the upcoming virtual gathering. 

More articles by John Kingston

Reflecting strong trucking market, TA sold huge amounts of diesel in Q4 2020

Drilling Deep: Battery technology racing ahead; so is the price of diesel fuel

Great commodity price surge not just about oil and may be impacting trucking

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.

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