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777 Sourcing Journal

Industrial markets, manufacturing and procurement reporting.

Market brief

Benchmark diesel price up as market takes a short breather

After months of volatility, the diesel market going into Tuesday appeared to have calmed down, at least for now. The day also featured the release of the weekly benchmark diesel price from the Department of Energy/Energy Information Administration that is used for most fuel surcharges. After a big one-day increase la...

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The Department of Energy/Energy Information Administration’s weekly benchmark diesel price rose 9.7 cents/gallon this week to $6.276/g, according to FreightWaves. FreightWaves reported that DOE/EIA made the price effective Monday and released it Tuesday. The price remained about 25 cts/g below the all-time high of $6.529/g set on September 22, according to FreightWaves. The increase followed three weeks of declines since that high.

In the CME commodity exchange futures market, ultra low sulfur diesel settled at $4.9344/g on October 13, according to FreightWaves. Around 10:30 a.m. EDT Tuesday, it was at $4.9457/g. Soon after, oil prices moved sharply lower after multiple news outlets reported unconfirmed reports that Qatar and Pakistan had proposed new talks aimed at ending the Iran war, FreightWaves reported. Those reports circulated Monday and appeared to push oil markets lower Tuesday.

The crack spread between first-month Brent and second-month ULSD on CME mostly ranged from 83 to 88 cts/gallon for about a month, with occasional moves over 90 cts/gallon, according to FreightWaves. Operations at the Phillips 66 Bayway refinery in New Jersey were said to be continuing normally after Phillips 66 locked out Teamsters members Monday afternoon following the expiration of their contract, FreightWaves reported. FreightWaves reported that the lockout should not have an impact on prices. According to FreightWaves, the DOE/EIA price is used for most fuel surcharges, so it is the benchmark buyers use for those charges.

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