More oil out of the Gulf translating to lower prices
The benchmark diesel price used for most fuel surcharges fell after three straight increases. The post More oil out of the Gulf translating to lower prices appeared first on FreightWaves.
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Increasing reports of crude flows out of the Persian Gulf getting closer to pre-war levels is helping to push down oil prices. The benchmark retail diesel price used for most fuel surcharges has been impacted by that. The latest average weekly retail diesel price from the Department of Energy/Energy Information Administration was $6. 382/g, down 14. 7 cts/g.
It’s the first decline in four weeks and ends the three-week streak that saw the price hit new all-time highs each week. The price is effective Monday but published Tuesday. window. googletag = window. googletag || {cmd: []}; googletag. cmd. push(function() {var gptSlot = googletag.
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document. hidden) {googletag. pubads(). refresh([gptSlot]); } }, 30000); }); googletag. cmd. push(function() {googletag. display('div-gpt-ad-1709668545404-0'); }); As The Wall Street Journal reported, “Iran’s ability to choke off oil flowing through the Strait of Hormuz—and use that as leverage in talks with the U. S.
—is breaking down, raising the risk it will resort to military escalation to bolster its position.” Oil markets Tuesday were driven lower by that general consensus and a more specific report out of J. P. Morgan that said oil flows out of the Persian Gulf were getting close to pre-war norms. But crude is not the only oil that comes out of the Persian Gulf.
JP Morgan, according to reports, also said product exports are only slightly above 50% of the pre-war figures. One Middle East country that has not participated in the resumption of flows: Iran. The U. S. blockade of its reports has effectively halted exports, according to various reports. Over in the futures market, since a recent high settlement of $5.
262/g on September 16, which also was the highest settlement since the Iran war began, ultra low sulfur diesel (ULSD) on the CME sank to a settlement of $4. 6847/g Friday. It rebounded Monday and Tuesday, but it appears that movement is driven in part by the fact that the October ULSD contract expires Wednesday.
Short positions that rode the decline in the prior 7-8 trading sessions but then needed to cover those trades may have pushed up the settlement for October in Monday and Tuesday trading. The gain of more than 20 cts/g on those two days from Friday’s settlement was completely out of line with other markets. Both international crude benchmark Brent and U. S.
crude benchmark West Texas Intermediate continued their decline Tuesday. In other news impacting diesel consumers, Texas Governor Greg Abbott signed a disaster proclamation that will allow dyed diesel to be used on the road, beyond its normal agricultural uses. window. googletag = window. googletag || {cmd: []}; googletag. cmd.
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Abbott also asked for EPA Administrator Lee Zeldin to issue a temporary Clean Air Act waiver of federal ultra-low sulfur diesel rules. However, most refiners have switched their systems to producing only ULSD and little high-sulfur material, since it has a limited market in the U. S.
It is uncertain those refiners would change that approach if such a waiver was granted. More articles by John Kingston Another aspect of Montgomery: it might make human brokers more valuable Per diem: one approach is stable, other is higher window. googletag = window. googletag || {cmd: []}; googletag. cmd. push(function() {var gptSlot = googletag.
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This briefing is based on reporting from Freightwaves. Use the original post for full primary-source context.
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