The benchmark retail diesel price used for most fuel surcharges averaged $6.382 per gallon in the Department of Energy and Energy Information Administration weekly figure effective Sept. 28. The price fell 14.7 cents, the first weekly decline in four weeks and the end of a three-week streak of record highs, FreightWaves reported.
Lower crude oil prices contributed. Reports that crude flows out of the Persian Gulf are approaching pre-war levels pushed oil prices down, and a J.P. Morgan report cited by FreightWaves said product exports from the region remain only slightly above 50% of pre-war figures.
On the CME, ultra low sulfur diesel futures reached a settlement of $5.262 per gallon on Sept. 16, the highest since the conflict began. Futures then fell to a settlement of $4.6847 per gallon last Friday. Prices gained more than 20 cents over Monday and Tuesday, a move FreightWaves attributed partly to the expiration of the October contract on Wednesday, which pushed traders with short positions to cover.
Texas has issued a state disaster proclamation that allows dyed diesel to be used on roads beyond its normal agricultural uses. The fuel is chemically the same as road diesel, and dyed diesel carries a lower tax burden.
The Texas governor also asked the Environmental Protection Agency for a temporary Clean Air Act waiver of federal ultra low sulfur diesel rules. FreightWaves noted that most refiners have switched their systems to produce almost only ultra low sulfur diesel, so it is uncertain whether refiners would change output if a waiver were granted.
Source: FreightWaves - https://www.freightwaves.com/news/more-oil-out-of-the-gulf-translating-to-lower-prices