Benchmark diesel price up as market takes a short breather
After months of volatility, the diesel market going into Tuesday appeared to have calmed down, at least for now. The day also featured the release of the weekly benchmark diesel price from the Department of Energy/Energy Information Administration that is used for most fuel surcharges. After a big one-day increase last week in the price […] The post Benchmark diesel price up as market takes a…
In the past week, the diesel market appeared to stabilize after a period of volatility. On Tuesday, the weekly benchmark price for diesel, released by the Department of Energy/Energy Information Administration, rose 9.7 cents per gallon to $6.276 per gallon. This new price, effective from Monday, remains below the all-time high of $6.529 per gallon set on September 22.
The market had seen three weeks of declines since the all-time high. Despite a significant increase of over 21 cents per gallon on Tuesday, October 13, the ultra low sulfur diesel (ULSD) market on the CME exchange settled close to its October 13 price. However, the market volatility returned quickly after the release of the benchmark price, as oil prices dropped sharply due to unconfirmed reports of Qatar and Pakistan discussing a peace process in Iran.
The diesel market's stability in the crack spread between Brent and ULSD suggests that the balance between supply and demand remains unchanged.
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