Latest news with #ULSD
Yahoo
5 days ago
- Business
- Yahoo
Milestone: Diesel benchmark price lowest since September 2021
The benchmark diesel price used to set most fuel surcharges fell Monday to its lowest level since September latest average weekly retail diesel price published by the Department of Energy/Energy Information Administration is $3.451 a gallon. It was down 3.6 cents per gallon from the prior week and has now declined seven of the past eight Sept. 20, 2021, the price posted was $3.406 a gallon. Every price since then has been higher than what was posted this week. The next lowest came late last year, when a price of $3.458 a gallon was posted Dec. declines, offset in part by a 6-cent gain from two weeks ago, have taken the DOE/EIA price down 18.8 cents a gallon since the decline started after an April 7 posting of $3.639. The latest reduction in price comes against a backdrop of futures trading on the CME commodity exchange in ultra low sulfur diesel (ULSD) that has been mostly on a downward trend for almost three weeks, though the first two days of trading this week were significantly higher but would not be showing up yet in retail a recent May 14 high settlement of ULSD at $2.2061 a gallon, two steps backward and one step forward brought ULSD down to a settlement of $2.0172 on Friday. Futures prices moved up Monday despite the weekend news that the OPEC+ group would increase output in July by an additional 411,000 barrels a day, another in a series of increases of that magnitude that have been going on for several months. At this rate, the 2.2 million-barrel-per-day output cut OPEC+ has had in place going back in pieces to 2023 will have been completely unwound by the fall. ULSD settled at $2.0445 on Monday, a gain of 2.73 cents per gallon despite the increase, which had been expected. Prices Tuesday rose again, settling up 5.54 cents to $2.0999 a gallon. Despite the increases in the past two days, the larger picture for U.S. diesel is that the market is being weighed down relative to the crude market by demand that is not just weak in the short term, but is continuing a now-multiyear decline. The decline in diesel consumption compared to the past 10 years of data for the corresponding time at the end of May is of nonjet fuel distillates, a category that is almost 90% ULSD, was 3.65 million barrels a day in the week ended May 23, according to the latest weekly report of the EIA. It's the third consecutive year that the demand figure for the last week of May was less than in the prior it is because of upticks in intermodal service, better diesel engine efficiency, conversion of heating oil usage to natural gas (because heating oil is in that number) or a series of relatively warm winters in the U.S. Northeast where heating oil is the fuel of choice, the demand figure stands in stark contrast to the 10-year average for May's final weekly EIA report of 3.92 million barrels a day. Between 2015 and 2018, weekly U.S. nonjet distillate demand regularly topped 4 million barrels per weakness has pushed the spread between ULSD and world crude benchmark Brent to about 50 cents per gallon in recent days. Outside of a few days in March, that spread has regularly been well above 50 cents this year and was more than 60 cents at the start of 2025. (However, numbers in the 40s were regular occurrences last year.)The weakening spread means diesel has been on a steeper decline in recent weeks that has not been seen in crude markets. Since that recent May 14 high, Brent was down 2.2% through the Monday settlement, but ULSD is down 7.3%. That stability in crude was noted Monday in an interview on CNBC with Helima Croft, the managing director and global head of commodity strategy at RBC Capital Markets. Referring to statements from OPEC that demand for oil remains healthy, Croft said that 'they're saying the market can take these barrels.' 'If you look at where prices are right now, we have not had a major sell-off since OPEC+ announced they were going to start putting more barrels on the market,' Croft said. 'We're not in the 70s, but given all the concerns about the China-U.S. trade war, hanging in in the mid-60s for Brent prices isn't so bad for a number of countries that have some spare capacity.' Brent settled Monday at $64.63 a barrel. It last settled above $70 on April 3. Tuesday's settlement was $65.63b, up $1. More articles by John Kingston Georgia tort reform aims to change practices in judicial 'hell hole' A Lego approach helps prepare Manhattan Associates' TMS for tariff chaos BMO's Q2 earnings show no improvement in credit conditions for trucking The post Milestone: Diesel benchmark price lowest since September 2021 appeared first on FreightWaves. Sign in to access your portfolio
Yahoo
20-05-2025
- Business
- Yahoo
After surge in diesel futures price, retail prices catch up, benchmark rises
The diesel benchmark price used for most fuel surcharges took its biggest one-week leap Monday since January. The Department of Energy/Energy Information Administration average weekly retail diesel price rose 6 cents a gallon to $3.536. It ends a streak of five consecutive declines and is the biggest increase since the price of Jan. 20. But the price now is only 0.2 cents a gallon more than where it was four weeks ago, on April 21. The futures price for ultra low sulfur diesel (ULSD) on the CME commodity exchange had risen for much of the first two weeks of May. With the normal lag of retail prices to futures and wholesale prices, the jump in the benchmark was not surprising. ULSD on CME climbed from a recent low of $1.9766 a gallon on May 7 to reach as much as $2.1713 a week ago on May 13. Much of that rise was in sympathy with a general rebound in most asset classes following the Trump administration's decision to back off the most punitive tariffs for Chinese futures have slid since then, settling Monday at $2.1277 a gallon. Oil prices are managing to hold reasonably steady despite the continuing drumbeat of bearish supply/demand news. The latest set of numbers came from the monthly report of the International Energy Agency last week. The closely watched supply/demand report said the annual rate of demand growth in the first quarter was 990,000 barrels a day but that the rate of growth would slide to an annualized rate of 650,000 barrels a day for the remainder of the year. Excluding COVID years, it is rare to find an annual increase of less than 1 million barrels a day in the annual growth of petroleum. The IEA also forecast that growth would be 740,000 barrels a day in 2025 and 760,000 in 2026, also numbers that would be considered far from robust. (The IEA noted that the 2025 estimate is slightly higher than the prior month's forecast.)The IEA said the low rates of growth could be attributed primarily to two things. One is 'economic headwinds.' But a second is what the IEA said are record sales of electric vehicles worldwide, which the agency has been saying for many months has been a bearish factor in the market for the marginal barrel of consumption, which is where the price is set. Another factor that has been cited for the fact oil has not fallen further than it has already is the level of global inventories of all petroleum products and crude. The IEA reported that may be shifting, with significant global stock increases in March. But the agency also said global inventories of 7.7 billion barrels was 'well below' the five-year average for the month. The tightness of inventories can be seen in the continuation of the futures market in a backwardation structure. In backwardation, the price declines as it moves out on the calendar. For example, in the current ULSD market, June is the first month contract. July is next and it is priced less than June. August is less than July, and so on. The spread has been volatile recently, but the first month has been firmly in a backwardation between first and second month for all of 2025, reflecting those tight inventories. When stocks are tight, the most valuable barrel is one that can be delivered as soon as possible; the backwardation is reflecting that. In the background to the market is the continued realization that the OPEC+ group is not deterred by falling prices – with global crude benchmark Brent dropping below $70 a barrel in early April and now just a few dollars more than $60 – and will go ahead with its plan to gradually unwind its production cuts. However, the monthly report of S&P Global Commodity Insights showed that in April OPEC+ output was essentially unchanged from March, even though the group on paper was expected to increase its output by about 140,000 barrels a day. More articles by John Kingston Georgia tort reform aims to change practices in judicial 'hell hole' New Jersey, feds take opposite paths on independent contractor rulesState of Freight takeaways: Freight crash may turn into sudden revival The post After surge in diesel futures price, retail prices catch up, benchmark rises appeared first on FreightWaves. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
13-05-2025
- Business
- Yahoo
Fifth straight drop in benchmark diesel comes as futures prices rise sharply
The fifth consecutive decline in the benchmark diesel price used for most fuel surcharges is likely the end of the road for this particular downward cycle. The Department of Energy/Energy Information Administration average weekly retail diesel price dropped 2.1 cents a gallon to $3.476 effective Monday, announced on Tuesday. The five-week decline from $3.639 a gallon on April 7 marks a drop of 16.3 cents a gallon during that time. But for the declines to continue, they would need to fight back against the headwinds of ultra low sulfur diesel (ULSD) prices on the CME commodity exchange, which have turned sharply higher in just the past five trading days. ULSD settled Wednesday at $1.9766 a gallon, the third time in the prior four trading days it had settled at less than $2. But since then, it has climbed sharply, settling Monday at $2.1111. At approximately 11:30 a.m. EDT Tuesday, ULSD was up another 3.3 cents, an increase of 1.56%, to $2.1441 a gallon. That number, if it was Tuesday's settlement, would have been the highest since April 24. Much of the increase came Monday, when ULSD rose 4.47 cents, or 2.16%, to the $2.1111 mark, driven in part by the rise in virtually all financial assets following the China-U.S. agreement on lowering tariffs. Even in the face of increasing OPEC+ production into a market that has been seen as weak, prices in key crude benchmarks have risen in recent days. Brent, the world crude benchmark, rose to settle at $64.96 a barrel Monday, up from $60.23 on May 5. One reason cited for the upward market pressure is the data showing worldwide inventories are tightening. For example, the weekly EIA inventory report released last week, with data through May 2, showed ULSD inventories in the U.S. at 97.3 million barrels. The average of ULSD inventories for the first week of May from 2018 to 2024 was 113.9 million barrels, though that figure would have been impacted to some degree by the turmoil of COVID. Potentially more revealing is the spread between the first and second month's ULSD contract on CME. When a market is dealing with tight inventories, it will be structured in a situation known as backwardation, with the front month more expensive than the second month, the second month more expensive than the next month and so on. In a perfectly balanced market, the exchange prices should rise month to month, reflecting the time value of money and the cost of storage. When inventories are tight, the most valuable market is the current month. And the backwardation is reflecting that in the ULSD market. But meanwhile, possibly reacting to the latest news of an increase in OPEC+ production, the backwardation in Brent settled Tuesday at 57 cents/barrel. On April 22, it was $2.95/b, suggesting that while products like ULSD might be dealing with tightening inventories, the situation in crude might not be as much of a squeeze. The spread between first month and second month ULSD had tightened to 1.42 cents per gallon by May 6, with front month June barrels worth that much more than those for July barrels. But since then, the spread has widened to a settlement Monday of 3.32 cents. That is still not as wide as where the spread was a few weeks ago. It hit 7.69 cents on April 28. But the sum total of the backwardation shows a market whose structure is reflecting tight inventories. More articles by John Kingston California deal with 16 states would end key parts of Advanced Clean Fleets rule 2 markets in 1 quarter: Auto-hauling demand volatile for Proficient New Jersey, feds take opposite paths on independent contractor rules The post Fifth straight drop in benchmark diesel comes as futures prices rise sharply appeared first on FreightWaves. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Reuters
29-04-2025
- Business
- Reuters
Mexico's Olmeca refinery will restart and halt was 'nothing serious,' president says
MEXICO CITY, April 29 (Reuters) - Mexico's new Olmeca refinery is ready to restart production, Mexican President Claudia Sheinbaum said on Tuesday, denying that a temporary outage had been caused by sabotage of its catalytic cracking unit. Located at the port of Dos Bocas, the Olmeca refinery is still far from meeting the gasoline and diesel production goals set by Sheinbaum's predecessor. The Reuters Power Up newsletter provides everything you need to know about the global energy industry. Sign up here. "It's not like that," the president replied to a question during a press conference regarding alleged sabotage at state energy company Pemex, but gave no further details. The catalytic cracking unit is an important gasoline-producing part of the refinery that uses fluidized catalyst to crack heavy hydrocarbon molecules into gasoline molecules. Sheinbaum said she would ask a Pemex official to report on what happened. "It's not about the refinery suddenly not working. It's a smaller issue," she said. "It was producing 100,000 barrels a day and is about to start up again. There's nothing serious." Pemex did not respond to a request for information about the events at the refinery, the date of any incidents, or the current levels of production. The refinery only processed 6,797 bpd in February and none in January when the company reported problems with higher-than-usual contents of salt and water in the crude oil Pemex pumps. It has a capacity to process 340,000 bpd. Since June 2024, processing has been marginal. Reuters reported last week that Pemex exported two shipments of ultra low sulfur diesel (ULSD) processed in Olmeca because the infrastructure needed to distribute the much-needed motor fuel that Mexico imports is not yet ready.
Yahoo
29-04-2025
- Business
- Yahoo
Benchmark diesel price sees third straight decline, now at 2025 low
The benchmark price used as the basis for most fuel surcharges has fallen to its lowest level in 2025, but diesel futures markets are starting to show some sign of upward movement. The weekly price published by the Department of Energy/Energy Information Administration rose 2 cents a gallon, effective Monday, to $3.514. The last time it was less than that was Dec. 30, when the price closed out 2024 at $3.503 a gallon. The latest price was the third straight decline in the benchmark. It has fallen 12.5 cents during that period. This week's decline came against a backdrop of the futures price of ultra low sulfur diesel (ULSD) starting to move upward after weeks of languishing at less than $2.10 a gallon. An April 10 settlement of $2.0464 for ULSD on the CME commodity exchange has been followed by a series of two-steps-forward, one-step-back increases that brought the settlement Monday to $2.1755, a gain of 13 cents a gallon in 11 trading days. However, at approximately 11 a.m. EDT Tuesday, ULSD was trading down about 2% on the day. But it may be short-lived in part due to the calendar. A factor that may tamp down any future wholesale and retail prices is the rollover of the front ULSD contract after trading Wednesday. The rollover is the expiration of the front month contract to be replaced by the second month contract as the front month. The May contract will expire after trading Wednesday, the last day of April, and the June contract will become the front month. That is relevant this month because the market is in a fairly steep backwardation, in which the front month has a higher price than the second month. In a perfectly balanced market, market structure is the opposite, with the second month higher than the first to reflect the cost of storage and the time value of money. That situation is called contango. When there are concerns about inventories, a backwardation develops. Even in a market where weakness appears more likely than strength, there are numerous comparisons of data on stocks that show them to be relatively tight compared to historic norms for this time of year. The backwardation in ULSD has been hanging around the 4-cents-a-gallon level – the May contract is that much more expensive than the June contract – and the spread blew out Monday to about 7.7 cents. But what that means is that when the May contract disappears after April 30, many of the gains in the front month diesel price that have resulted in higher futures prices – and with it the possibility of higher wholesale and retail prices – will 'fall' because of the substitution of the now-lower June contract for the expiring May contract. That should have a dampening effect on prices. Even though a slowdown in maritime traffic and the concurrent drop in trucking to move freight that is staying home in exporting countries has loomed on the horizon, diesel markets are outperforming crude. On April 10, the price of ULSD on CME was just under 54 cents per gallon more than the price of Brent crude, the world benchmark. By Monday, that spread had widened to about 60.75 cents. Crude prices did rise last week driven in part by recoveries in equity markets. But a battle is looming within the OPEC+ group and its attempts to keep production in check by the rising flow of oil out of Kazakhstan, which is not a member of OPEC but is part of the OPEC+ alliance of non-OPEC exporters nominally led by Russia. In an interview of Kazakhstan's energy minister, Erlan Akkenzhenov, with news agency Reuters, he said the country would 'act in accordance with national interests with all the ensuing consequences,' a signal it might not want to abide by its OPEC+ production quota, which it already is violating. Kazakhstan exceeding its quota has been a significant problem within the OPEC+ group and has the potential to become more of an issue in the group's effort to restrain output. More articles by John Kingston A market on the precipice: 5 takeaways from the April State of Freight TFI's Bedard upbeat on revamped US LTL operations even as numbers sink 2 more charged in death of Louisiana staged truck accident witness The post Benchmark diesel price sees third straight decline, now at 2025 low appeared first on FreightWaves. Sign in to access your portfolio
