The federal government's weekly benchmark diesel price has climbed for a third consecutive week even as oil futures fell on renewed hopes for a Middle East peace deal. The Department of Energy and Energy Information Administration average weekly retail diesel price rose 17.9 cents per gallon to $5.313 per gallon, adding 73.5 cents per gallon over the three week stretch.
The increase has pushed the benchmark to its highest level since June 8, when it stood at $5.21 per gallon, though it remains just under the $5.351 per gallon level recorded in late April. Despite the retail climb, futures markets reversed sharply this week after a pause in overnight attacks tied to the Iran conflict and renewed talk of negotiations lifted early trading before crude prices fell again.
The unusual divergence between crude oil and diesel pricing has widened to a level with no recent precedent, as diesel futures have declined far less than crude benchmarks on a percentage basis. Analysts point to several factors adding tightness to the diesel market beyond the broader crude picture, including reduced Russian refinery output following drone strikes that pushed processing to its lowest level in more than two decades, along with falling water levels on the Rhine River in Europe that are beginning to limit fuel barge shipments.
For US fleets, the gap means diesel prices at the pump are unlikely to fall as quickly as headlines about crude oil price drops might suggest, keeping fuel costs elevated for carriers budgeting through the remainder of the year.
Source: FreightWaves -- https://www.freightwaves.com/news/benchmark-price-is-up-futures-down-diesel-on-its-own