The price used as the basis for most fuel surcharges rose for the second consecutive week Monday, announced Tuesday, as the broader oil futures market has barely reacted to two developments that might otherwise be seen as a reason for significant price moves.
The Department of Energy/Energy Information Administration average weekly retail diesel price rose 3.2 cents/gallon to $3.766/g.
The two increases come after five weeks of declines. After that up and down, the price released Tuesday is just 0.8 cts/g more than where diesel stood on July 14, when it was $3.758/g.
Oil markets in just the last two days experienced two developments that in other times might have sent prices skidding in one instance or soaring in another.
On Sunday, the OPEC+ group agreed to increase production by 137,000 b/d in October. But that increase is less than the hikes the group in recent months has said it would implement, with 411,000 b/d being a number it has agreed upon several times.
Despite those repeated announcements of production increases, OPEC+ only had one month where its output, according to S&P Global Commodity Indices, rose by a large amount: 600,000 b/d between May and June. It then declined 140,000 b/d in July.
July’s output according to SPGCI was 41.65 million b/d. A year earlier, according to SPGCI data, it was 41.03 million b/d. Pulling apart the numbers lead to a calculation that almost all of that increase came in that one month, so that OPEC+ pledges to put more oil on to the market are not being greeted by any sort of selloff.
An international incident Tuesday–the Israeli attack on Hamas officials in Doha, the capital of Qatar–also resulted in little reaction. Qatar is a significant oil producer of about 1.8 million b/d, but the Israeli attack did not threaten that output.
By the end of trading Tuesday, global crude benchmark Brent had risen just 37 cts/b, to $66.39/b. Its settlement on the first day of September was $69.14/b.
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