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Weekly DOE/EIA diesel price up 4.4 cents, but trails moves on CME and wholesale

Timing of survey and events Monday regarding Colonial Pipeline suggest no impact from the closure

Image: Jim Allen/FreightWaves

The second part of Monday’s two-event diesel price day saw the weekly Department of Energy’s Energy Information Administration average retail diesel price rise 4.4 cents per gallon to $3.186.

That is less than half of what commodity and wholesale diesel prices rose during the past week.

The timing of the shutdown of Colonial Pipeline and the weekly survey of diesel prices Monday makes it unlikely that there was any market impact from the line’s closure. Even if there was, by the end of the trading day, the price of ultra low sulfur diesel on the CME commodity exchange rose just 0.3%, to $2.0166 a gallon, following a midday report that the line was likely to come back by the end of the week, at least partially.

However, the increase Monday did complete a six-day increase in that benchmark price of 8.7 cents from the April 30 settlement of $1.9211 a gallon.

The price of wholesale diesel fuel as measured by the ULSDR.USA data feed in SONAR was up 9.5 cents in the past week, increasing to $2.19 a gallon Monday from $2.103 a week ago.

To learn more about FreightWaves SONAR, please go here.

Diesel prices are moving higher as part of the broader wave of commodity prices that has made lumber prices a national story, brought copper to levels never seen before and created fears of a broader inflationary trend. 

However, diesel prices have been strengthening at a rate more than that of crude. Although U.S. inventories of ultra low sulfur diesel are near their five-year average for this time of year, according to the EIA, there are other signs of diesel tightness. The spread between global crude benchmark Brent crude and the ULSD price on CME stood Monday at $16.37 a barrel, the highest level since the end of March 2020.  

The premium of front month diesel over the price 12 months out, a number that is heavily influenced by inventories, remains at levels that suggest some tightness in stocks.

Following two weeks of increases and one week of an unchanged DOE/EIA number, the DOE/EIA price is just 0.8 cents a gallon less than where it was when it completed its record-breaking 20-week run of increases.

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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.