Retail diesel prices measured by the Department of Energy/Energy Information Administration average retail price now have moved higher for 3 consecutive weeks, nevertheless it doesn’t seem like on the back of upper consumption.
The weekly DOE/EIA diesel price, used as the idea for many fuel surcharges, climbed 4.4 cents a gallon Monday to $3.813. Three weeks of increases followed nine weeks of declines.
And while it was not a consider the retail prices surveyed by the EIA to supply its closely watched number, ultra low sulfur diesel (ULSD) prices on the CME commodity exchange rose almost 10 cents a gallon Monday, climbing to $2.6147. It’s the very best settlement since April 16.
As has been the case the past few weeks with a general overall rising trend in oil markets, there may be little specific news that has been behind the upward thrust. Analysts are citing a grab bag of general reasons, with the approach of Hurricane Beryl now in the combo though the storm is steering far clear of any oil and gas production areas within the Gulf of Mexico.
The upward trend in diesel — in addition to other oil markets — is coming whilst a brand new set of information has emerged that shows diesel demand flat to weakening.
Weekly EIA data on U.S. production, consumption and inventories is taken into account preliminary, while the monthly figures released on a two-month lag are seen as more definitive.
The April report released Friday shows that ULSD consumption in April of three.778 million barrels a day was the bottom for that month since 2017, excluding the pandemic 12 months of 2020.
And while it was higher than the March figure of three.633 million barrels a day, that number for April was the fourth-lowest for the reason that end of 2020, when consumption was headed up because the economy moved toward the nice freight market of 2021-2022.
In April 2017, ULSD consumption was 3.601 million barrels a day. In between, it got as high as just over 4 million two times and was just below 4 million a couple of times.
What which means is that whilst more freight is moving on the road, diesel consumption appears to have flatlined.
It may be that fuel mileage gains are offsetting any increase in traffic. For instance, Mike Roeth, head of the North American Council for Fuel Efficiency, wrote in late 2022 that fuel efficiency in Class 8 trucks had improved to six.24 mpg from 5.97 mpg within the prior three years. That will not look like much, nevertheless it adds up in a market that had been mostly holding within the 3.8 million- to 4 million-barrel-per-day level.
And others have touted that it is feasible to achieve 10 mpg on an open highway, but that may be a recent development.
The trend isn’t unique to diesel. April gasoline consumption of 8.831 million barrels per day was the bottom for April since 2012, excluding April 2020. Nonetheless, unlike diesel, that market has been impacted by some extent of electrification of passenger vehicles.
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