The Department of Energy / Energy Information Administration’s weekly average retail diesel price rose Tuesday for the 10th consecutive week, the same day crude oil prices fell.
Arriving a day later than usual due to the July 4 holiday, the DOE / EIA price stood at $ 3.331 per gallon, an increase of 3.1 cents from the previous week.
Not only was the price the 10th consecutive week of increase, it was the 11th consecutive week without a decrease. The price was unchanged during the week of April 26, when it stood at $ 3.124 per gallon. Since then, he has added 20.7 cents per gallon.
Prior to the sharp drop in the price of ultra-low sulfur diesel on the CME on Tuesday, retail prices had lagged behind movements in the price of wholesale diesel. The FUELS.USA data series in SONAR has remained below $ 1 a gallon since mid-June, while historically that gap tends to be between $ 1 and $ 1.05.
Even with this small spread, the increase in the wholesale price of diesel over the past week has been enough to help retail diesel rise. The national average wholesale price of diesel, as found in the ULSDR.USA data series in SONAR, increased 5.5 cents between June 29 and Tuesday.
But the market is now facing the sharp drop recorded in commodity markets on Tuesday at the back of OPEC and its oil-exporting colleagues in the OPEC + group’s failure to approve the release of more oil. , despite a growing imbalance between supply and demand. Oil prices rose in the initial reaction to the outcome of the meeting, but fell later.
When OPEC does not do what was expected, the markets tend to go down. The first reaction to rising prices went against the norm. But he made up for it later in the day.
By the time prices stabilized for the day, the ULSD price on CME was down 7.42 cents per gallon to $ 2.1049 per gallon. This was the lowest settlement since June 16. It was also the biggest one-day drop in the ULSD price since falling 7.55 cents on April 14.
The 3.41% drop far exceeded declines in crude, where WTI fell 2.38% and Brent fell 2.82% on the day.
Oil prices were also sent lower by a 0.35% increase in the value of the dollar as measured by the DXY index. It’s a big move for a day. Oil prices tend to move inversely with the greenback’s trends.
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