Diesel fuel price set a new historical record

June 7, 20220

The average price of diesel fuel today set a new historical record.

Almost a month ago, on May 9, the cost of a gallon was 5.62 dollars, but today it increased by 16.4 cents and amounted to 5.70 dollars.

Ultra Low Sulfur Diesel (ULSD) prices rose on the CME commodity exchange last week. While retail and futures prices do not move in tandem, a rise of almost 28 cents between May 27 settlement and last Thursday set the stage for a higher DOE/EIA price.

ULSD on the CME is up 62.1 cents since May 20.

Since that day, the price of ULSD has risen for 10 consecutive days, and has risen by about $2.09 per gallon since the start of the year.

However, this price race was won by diesel fuel. On May 20, a barrel of diesel fuel cost $44-$45 more than a barrel of Brent oil. On Monday, this spread was over $61 per barrel.

As the DOE/EIA reported an East Coast average retail price increase of just 7.4 cents to $5.922 a gallon, the gap narrowed to 21.9 cents a gallon. That’s down from 33.4 cents just two weeks earlier, although even at its current value, it’s still higher than the historically fixed spread to a few cents.

Another key factor in watching the East Coast contraction is the spot market spread between diesel barges and pipeline volumes traded on the Gulf Coast versus New York Harbor. A few weeks ago, this spread reached an unheard of 70 cents.

And while the spread reported by the benchmark gateway General Index edged up slightly on Monday to 7.75 cents a gallon, it is within a gap range that can be considered normal.


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