«Hasn’t happened for 30 years!» History-making diesel prices decline
Funds and oil markets fell on Friday because of concerns over a new strain of coronavirus.
The CME ULSD market crash was one of the largest ever since 1980. The CME’s ULSD dropped to 28,85 cents a gallon, bringing the price to $ 2,0945.
The fall of 28,85 cents a gallon is more than the price crash that occurred on January 17, 1991. Then the price was down 29,6 cents to 62 cents a gallon. In January 1991, prices fell by 32,3%, the largest one-day drop in percentage terms, and the largest direct drop.
In percentage terms, the 12,11% drop in prices on Friday was the third largest since the start of the pandemic. On March 9, 2020, prices fell by 22,2%, on April 21 last year – by 16,1%, the day after the oil price fell to negative in one historical day.
It’s difficult to say how the wholesale markets will react to the fall in prices on the stock exchange. However, wholesale prices must remain competitive with those for bulk supply channels, but according to a formula they must be linked to spot prices.
In October, the national average retail price for ULSDR.USA on SONAR was $ 2,688 per gallon. By October 27, the price dropped to $ 2,496 a gallon and then grew to $ 2,58 a gallon on Friday.
In terms of retail prices, it was found that retailers, who make their own decisions about which filling stations to set individual prices at, try to maintain higher prices for as long as possible. Since the fall is so large and it isn`t known how much the wholesale sales will decline, it`s difficult to predict when retail shoppers will face the impact of the fall.
Last Monday, after a 10-week hike, the DOE / Energy Information Administration’s diesel weekly retail price dropped to $ 3,724 a gallon.