Diesel price stability rolls on with a minor upward move this week

But as seems to have been the case in many weeks, the stability was broken in futures markets on the day the DOE/EIA price was released. 

After settlements Friday and Monday on the CME commodity exchange that came in at less than $2.30/g, the price of ultra low sulfur diesel on the CME at approximately 11:40 a.m. Eastern time Tuesday was up 5.3 cts/g to $2.3394/g.

The Tuesday jump appeared to be linked to statements made by President Donald Trump in his annual speech to the UN, where he said European nations were “funding the war against themselves” by continuing to purchase Russian oil and gas as he urged them to halt that buying.

That development came amid a mixed bag of bullish and bearish news in the market. On the bullish side, Ukrainian drones were said to have successfully carried out attacks on various parts of Russian oil facilities deep into the country. 

Despite that effort, Bloomberg reported that the four-week average of Russian export shipments had risen to 3.62 million b/d in the week ending September 21, the highest since May 2024. 

But for diesel consumers, the news was not all that bearish. Diesel exports out of Russia, a major supplier, were reported to still be holding about 400,000 barrels/day. In February, that figure was 820,000 b/d.

Stability in the outright price of retail diesel is being largely matched by its spread against Brent crude, the global benchmark. 

A comparison of the front month ULSD and Brent contracts on CME showed a spread after Monday’s settlements of about 70.7 cts/g. That was down from 76.3 cents/g Tuesday, the recent high, but higher than 69.5 cts/g on September 12. That up and down movement around the 70 cts/g market  has been a feature of the Brent/diesel spread since late July, when it first fell below 80 cts/g after a higher spike driven by tight inventories. 

But various data points are suggesting that inventory squeeze has eased. For example, U.S. inventories of ULSD were reported August 8 at 104 million barrels. But in the most recent report, released Wednesday for data through September 12, stocks of ULSD were 113.8 million barrels. That’s the highest they’ve been since the end of January. 

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