The benchmark diesel price used for most fuel surcharges in the trucking industry has fallen to its lowest level since mid-March. The Department of Energy/Energy Information Administration average retail diesel price declined 17.3 cents to $5.35 per gallon for the week, the lowest figure since March 23, when prices were surging in the early weeks of the Middle East conflict that disrupted oil flows through the Strait of Hormuz.
The drop was the second-largest weekly decline in the current volatile market, exceeded only by a 20.5-cent slide on April 20 that followed a ceasefire announcement. Regional differences were pronounced: the average fell 23.1 cents in the Midwest, where refinery issues have largely been resolved, but only 6.8 cents in New England and 7.7 cents on the West Coast excluding California.
The retail decline tracks a slide in ultra-low sulfur diesel futures on the CME exchange, which fell from a settlement of $4.1625 per gallon on May 19 to $3.4886 by the end of last week, before rebounding more than 15 cents as weekend reports suggested a reopening of the Strait of Hormuz was becoming less likely.
Oil executives warned that the downward trend may not last. Chevron CEO Mike Wirth said inventory buffers are being steadily drawn down, while ExxonMobil senior vice president Neil Chapman said markets are approaching unusually low inventory levels that could push prices sharply higher within weeks.
Source: FreightWaves -- https://www.freightwaves.com/news/benchmark-diesel-falls-sharply-even-as-talk-emerges-of-tank-bottoms