The weekly benchmark diesel price from the Department of Energy and Energy Information Administration rose 9.7 cents to $6.276 per gallon, according to FreightWaves. The price, which most fuel surcharges reference, takes effect Monday and is released Tuesday.
The reading remains about 25 cents below the all-time high of $6.529 per gallon set on Sept. 22. The benchmark had declined for three consecutive weeks after that peak before this week's increase.
The rise followed a move in the futures market. Ultra low sulfur diesel traded on the CME gained more than 21 cents per gallon on Tuesday, Oct. 13, and settled at $4.9344. By mid-morning on Oct. 20 the contract traded at $4.9457, close to that settlement. Oil prices then fell sharply during the session after unconfirmed reports that Qatar and Pakistan had proposed new talks aimed at ending the conflict in the Middle East.
The crack spread between front-month Brent crude and second-month ultra low sulfur diesel has held in a range of 83 to 88 cents per gallon for about a month, with occasional moves above 90 cents. The spread indicates that diesel remains stronger than historic differentials while the gap has stopped widening.
Phillips 66 locked out members of the Teamsters at its Bayway refinery in New Jersey on Monday afternoon after the union contract expired. Operations at the refinery were reported to be continuing normally. A refinery can keep running for an indeterminate period before a reduced workforce affects output, and FreightWaves said the lockout should not influence prices.
Source: FreightWaves - https://www.freightwaves.com/news/benchmark-diesel-price-up-as-market-takes-a-short-breather