Diesel Benchmark Hits Record while Futures Prices Retreat

U.S. benchmark diesel prices reached another record this week even as futures prices for ultra-low-sulfur diesel retreated from their recent peak.

 The national benchmark has reached a record while diesel futures have recently declined.

The Department of Energy's Energy Information Administration raised its benchmark diesel price by 24.4 cents per gallon to $6.529, effective Monday and published Tuesday.

It marked the ninth increase in 11 weeks and another record high, according to FreightWaves.

Since the benchmark stood at $4.578 per gallon on July 6, it has risen by $1.951 per gallon.

Meanwhile, the futures market has moved in the opposite direction. Ultra-low-sulfur diesel futures on the CME reached a record settlement of $5.262 per gallon on Sept. 15. By Monday, the contract had fallen 37.25 cents to $4.8895.

At about 9:25 a.m. Tuesday, the contract was down another 9.56 cents, or 1.96%, to $4.7939, nearly 47 cents below its Sept. 15 record.

FreightWaves reported that the decline followed signs of improving oil flows and possible progress on Saudi Arabia's East-West crude pipeline, which carries oil to the Red Sea port of Yanbu and provides an alternative to shipping through the Strait of Hormuz.

The futures decline also coincided with reports of increased oil and liquefied natural gas flows through the Strait of Hormuz and speculation about possible diplomatic contacts involving the United States and Iran.

The divergence between the weekly retail benchmark and futures prices illustrates the lag between wholesale market movements and prices used for fuel surcharges and other commercial purposes.