Benchmark Diesel Price Rises Despite Declining Futures
The U.S. Department of Energy's weekly average retail diesel price rose for the third consecutive week, reaching $5.313 per gallon—its highest level since early June and nearly matching levels from late April. This increase contrasts with a sharp decline in crude oil futures prices during the same period. The recent volatility is attributed to geopolitical developments such as paused U.S.-Iran attacks and potential peace negotiations. Meanwhile, diesel prices on commodity exchanges have not kept pace with falling crude rates. On Monday alone, Brent crude dropped 8.7%, while ultra low sulfur diesel (ULSD) fell just 1.65%. This has led to a historically wide price spread between ULSD and Brent when converted into cents per gallon—exceeding $2/gallon for the first time in recent records. The widening gap is driven by multiple factors, including reduced refining capacity due to attacks on Russian refineries and declining Rhine River water levels affecting European fuel transport. These developments are creating tighter diesel supply conditions despite falling crude prices.
Topics: Brent crude decline diesel price increase fuel prices market volatility