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DOE / EIA Benchmark Diesel prices fall for 5 consecutive weeks

The weekly Department of Energy / Energy Information Agency’s five consecutive declines in average retail prices show that it has fallen for the first time in the weeks since September last year.

It fell 2.6 cents per gallon to $ 3.2626, and benchmark prices fell 10.8 cents per gallon in five weeks, down from the latest high of $ 3.734. The five-week decline is the first of that period after the five-week decline in September 2020 spans the one week in October. During that decline, the benchmark fell 5.4 cent gallons. This is just half the current level of decline. But the decline was against a smaller base, with a five-week streak starting at $ 2.441 per gallon.

The fall in retail diesel prices reflected in the DOE / EIA figures is only a small part of the commodity prices that fell last week, most of which occur on Mondays.

A week ago, on December 13, CME’s ultra-low sulfur diesel settled for $ 2.2328 a gallon. It was another stop for what was a roller coaster ride at oil benchmark prices.

For example, ULSD first responded to news of the Omicron variant the day after Thanksgiving, dropping to $ 2.0638, 8.83 cents per gallon. This remains the lowest price in the Omicron-led market, recording a three-day continuous rise in ULSD prices just days after the plunge the day after Thanksgiving. They are 7.28, 5.34 and 3.67 cents, respectively.

CME’s ULSD is steadily up to Thursday’s peak settlement of $ 2.2663 a gallon, as the market seemed happy with the idea that Omicron would hit oil demand quickly and relatively moderately. It has risen. However, it quickly reversed the course, dropping 9.33 cents in two days in the last two days of trading. The decline occurred at about equal half of Friday’s 4.64 cents and Monday’s 4.69 cents.

Otherwise, the oil market is experiencing a relatively dry run of news of other market movements. OPEC decided earlier this month to add an agreed production increase of 400,000 barrels per day in January, with suspicion that it might do so after news of the Omicron variant was reported. did. Crude oil releases from the US strategic petroleum reserves are waiting for bids that won’t come until the end of the new year, so new supplies through that channel will remain off for weeks.

The market has focused almost exclusively on whether Omicron influences demand. In particular, because diesel is an intermediate fraction like jet fuel, concerns about further reductions in air travel from current levels are damaging the spread between diesel and crude oil.

Weaknesses can be seen in the simple spread between Brent crude and ULSD on the CME Commodity Exchange. The first news about Omicron spread slightly, but on December 9th to 47.84 cent gallons. By Monday, the spread had fallen to 37.53 cent gallons. This is the lowest level since the wild trade the day after Thanksgiving.

However, this is the only payment for less than 40 cents in the last few weeks. Prior to that, spreads of less than 40 cents between ULSD and Brent persisted only in August. However, I am now in my late 30s for 3 consecutive days.

DOE will not delay next week’s price due to holidays. It will be published on Monday, December 27th.

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DOE / EIA Benchmark Diesel prices fall for 5 consecutive weeks DOE / EIA Benchmark Diesel prices fall for 5 consecutive weeks

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