US diesel below US$6 a gallon at 2-month low on easing tensions, weaker demand
NEW YORK: US diesel prices fell below US$6 a gallon on average on Saturday after two months above that threshold, retreating from record highs as easing geopolitical tensions and seasonal demand weakness reduce pressure on fuel markets.
US diesel prices plummeted below US$6 per gallon on average, marking a two-month low, as geopolitical tensions eased and demand weakened, according to a recent report. Diesel surged due to disruptions in oil supplies from the US-Israeli war against Iran and reduced output from Ukraine's attacks on Russian refineries. This rise in diesel prices, a major contributor to transportation and freight costs, contributed to overall inflation, burdening consumers, farmers, and businesses alike.
The national average retail diesel price reached US$5.998 on Saturday, surpassing the previous record of US$6.519 set in mid-September. The spike in diesel prices surged to as high as US$10 a gallon in California, where refining capacity is limited and fuel specifications are more stringent. The Trump administration introduced measures such as temporarily lifting federal taxes on red-dyed diesel, easing sanctions on Russian fuel, and launching an $8 billion support program for farmers to offset higher fuel costs during the autumn harvest.
Despite these efforts, supply concerns stemming from the ongoing Iran war persistently affected the market. Seasonal factors and a decline in crude oil prices, closely linked to diesel prices, are now helping to bring prices down. Brent crude futures have dropped 18.5% over the past two weeks. Demand typically decreases in the autumn as people travel less, hurricane season subsides, and the risk of Gulf Coast refinery disruptions diminishes, according to Patrick De Haan, GasBuddy's head of petroleum analysis.
Refinery maintenance is largely completed by November, allowing production rates to recover. These factors have also contributed to gasoline prices falling below US$4 per gallon this month for the first time since August 10, as per GasBuddy data.
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