Milestone: Diesel benchmark price lowest since September 2021

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.

Long-term slide in demand

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 stark.
Consumption 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 year.
Whether 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 day.
The 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.

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