The price of diesel fuel, which is of paramount importance to the truck industry, has fallen this week by an amount not seen due to the full-scale pandemic.
The Ministry of Energy / Energy Information Agency’s weekly average retail diesel price fell 4.6 cents to $ 3.674 per gallon. This decline is the largest since the 7.3 cent drop posted on March 30, 2020. At that time, the benchmark diesel numbers for fuel surcharges were in the midst of a pandemic collapse that fell from $ 3.079 on January 6. $ 2.386 for 19 consecutive weeks.
This week’s decline is the first time prices have captured some of the spot and wholesale market declines that first began when the oil market responded to the first news of the Omicron variant the day after Thanksgiving. The CME Commodity Exchange settled ultra-low sulfur diesel for $ 2.383 a gallon the day before Thanksgiving. Two days later, after the US market removed the vacation, ULSD’s price fell by about 29 cents per gallon to a settlement of $ 2.0945. The downward move finally bottomed out last Tuesday with a $ 2.0638 settlement.
Wholesale prices caught the decline. Based on data from SONAR’s ULSDR.USA data stream, the national average of wholesale diesel prices, the national average price fell from $ 2.58 on the last business day before Thanksgiving to $ 2.308 per gallon last Wednesday. bottom.
Since then, commodity prices have rebounded, raising the average wholesale diesel price on Monday to $ 2.344 per gallon. But that rise doesn’t capture what happened in oil and other markets on Monday. At this time, the level of stocks and commodities rose due to a significant rebound.
In particular, ULSD prices at CME on Monday rose 7.28 cents per gallon, up 3.47% to $ 2.1712. The rise has raised benchmark commodity prices by about 11 cents per gallon from where it was settled last Tuesday.
Retail prices are lagging behind wholesale movements, especially on the way down. Retail price decisions are made at the individual station level, and station owners have long sought to keep retail prices as high as possible, even at lower acquisition costs. The sharp difference between SONAR’s DTS.USA prices and the retail price decline reflected in ULSDR.USA figures means that FUELS.USA, which reflects its spread, exploded nearly $ 1.35 per gallon on Thursday. increase. That number exceeded the levels seen at the beginning of the pandemic, where spot and wholesale prices were plummeting at a dizzying rate.
FUELS.USA numbers have returned slightly to Earth, slightly below $ 1.30 per gallon on Sunday.
The oil market on Monday was supported not only by the rise in stocks, but also by the interpretation of Saudi Arabia’s monthly price formula for January, which was announced over the weekend. Saudi Arabia’s prices are different from benchmarks such as Brent, and their relative strength convinces some traders that the purchase order seen by state-owned Saudi Aramco is strong enough to widen these differences. Did. This is a sign of strong demand.
Largest benchmark since the early days of the pandemic DOE / EIA Diesel price decline
https://www.freightwaves.com/news/drop-in-benchmark-doe-eia-diesel-price-largest-since-pandemics-early-days Largest benchmark since the early days of the pandemic DOE / EIA Diesel price decline