Diesel Benchmark Rises Slightly Again as Market Stability Persists

Analytics

Diesel Benchmark Rises Slightly Again as Market Stability Persists

A fourth consecutive week of minor changes in the benchmark diesel price, crucial for calculating most fuel surcharges, highlights a market possibly characterized by either steady progression or stagnation.

The Department of Energy/Energy Information Administration reported a modest increase of 0.2 cents per gallon, bringing the average weekly retail diesel price to $3.697. Over the past three weeks, increments of 0.1 cents, 0.5 cents, and 1.2 cents culminated in an overall rise of 3.8 cents per gallon.

Significantly, the current price is notably higher compared to pre-Christmas levels, where the benchmark on Dec. 23 was $3.476 per gallon. This marks a 22.1-cent per gallon increase since then. Most of this rise occurred in early January, following new sanctions announced by the outgoing Biden administration against Russian oil shipping, pushing the ultra-low sulfur diesel (ULSD) settlement price on the CME commodity exchange to $2.621 per gallon on Jan. 17.

Though prices have gradually decreased to a recent settlement of $2.4358, retail prices haven’t mirrored this downtrend as substantially. When paralleled with initial volatility post-Russian invasion of Ukraine three years ago, current market steadiness is glaring.

Bloomberg's recent article highlights “Trump's Policy Deluge” causing stasis within the oil market, quoting Standard Chartered Bank's findings on market disorientation due to rapid policy shifts. Many traders, overwhelmed by these factors and unpredictable market triggers, have minimized risk exposure.

This Thursday, the diesel market might have shown signs of breaking away from the status quo, albeit temporarily, as ULSD prices rose 4.69 cents per gallon to $2.5034. However, subsequent dips, including a 7.11-cent decrease the next day, returned the price near its previous state.

Monday's slight gain cemented ULSD within the $2.43-$2.46.5 per gallon bracket, a range maintained for nine out of the last eleven settlements. Such minute fluctuations elicit efforts to pinpoint daily price movement catalysts. Accompanying ULSD's small increase was Brent crude’s 35-cent rise, elevating to $74.78 per barrel.

While news outlets speculated recent sanctions on Iranian shipping as a possible catalyst, the absence of major market imbalances and Bloomberg's highlighted trading inertia suggest little justification for substantive price shifts—until an unforeseen event occurs.

For more insights and industry updates, explore our Shop, Register, and explore our Help Center.

This article originally appeared on FirstELD.

More posts from News

News

FMCSA Active ELD Revoke List and the Importance of Compliance

The Federal Motor Carrier Safety Administration (FMCSA) plays a crucial role in ensuring the safety and reliability of commercial motor vehicles on American roads. As part of their oversight, they mandate the use of Electronic Logging Devices (ELDs) to monitor drivers’ hours of service (HOS) and ensure compliance with federal regulations. However, not all ELDs meet the necessary compliance standards. When a device no longer complies with FMCSA regulations or fails to meet performance standards, it is placed on the **FMCSA ELD Revoked List**. Below, we explore some of the key reasons why an ELD might be revoked and provide a table of current revoked devices.
Regulatory Compliance
Enhanced Safety
Read More

News

How ELDs Improve Fleet Management

In this guide we will explore the various features of ELDs and how they contribute to optimising fleet operations.

News

Why Are ELDs Mandatory For Commercial Trucks?

In this article we will explore the key features and benefits of ELDs, as well as the challenges that drivers and fleet operators may face during implementation.
Laptop

Register and get free access to the system

Registration to get free access to the system for a week and assess its capabilities by yourself

OR
Laptop

Schedule a video call meeting with our manager

Schedule a video call meeting with our manager to see the system in action and understand how it works