The diesel benchmark price for most fuel surcharges has reached its largest weekly LEAP since January.
The Energy/Energy Information Management Department averages retail diesel prices for 6 cents per gallon to $3.536. It ended a five-game winning streak that saw it fall in succession, the biggest increase since its price on January 20. But the price is 0.2 cents higher than it was on April 21 (April 21) four weeks ago.
Futures prices for ultra-low sulfur diesel (ULSD) on CME Commodity Exchange rose most of the first two weeks of May. With the normal lag of futures and wholesale prices in retail prices, it is not surprising that the benchmark rises.
ULSD on CME climbed from a low of $1.9766 per gallon on May 7 to $2.1713 a week ago on May 13. The general rebounds in most asset classes were sympathetic after the Trump administration decided to withdraw from the most punitive tariffs of China's importers.
Since then, ULSD's futures have slipped and are expected to be $2.1277 per gallon.
Oil prices remained fairly stable despite the ongoing bearish supply/demand news.
The latest figures come from the International Energy Agency's monthly report last week. The closely watched supply and demand report said the first quarter demand growth rate was 990,000 barrels per day, but for the remaining year, the growth rate will decline to an annual growth rate of 650,000 barrels per day. Excluding common years, there is an annual growth rate of less than 1 million barrels per day in oil's annual growth.
The IEA also forecasts a daily growth rate of 740,000 barrels in 2025, while a daily growth rate of 760,000 in 2026, which is also considered far from strong. (IEA notes that the 2025 estimate is slightly higher than the forecast last month.)
The IEA said the lower growth rate may be mainly attributed to two things. One is the "economic headwind". But the second is what the IEA is talking about record sales of electric vehicles worldwide, which the agency has said is a bearish factor for months, a market for marginal consumer barrels, which is price set.
Another factor cited for oil has not exceeded what has been reduced, which is the global inventory level for all oil products and crude oil. This may be shifting, with global stocks rising sharply in March, the IEA report. But the agency also said global inventory of 7.7 billion barrels is "far below the five-year average this month."
The tightness of inventory can be seen in the continuation of the futures market with a backward structure. While lagging behind, prices drop as they move on the calendar. For example, in the current ULSD market, June is the first month of contract. July is next, with prices lower than June. August is less than July, and so on.
The spread has been volatile lately, but the first month lagged firmly between the first and second months of the full year of 2025, reflecting these tight inventory. When stocks are tight, the most valuable barrel is the one that can be delivered as soon as possible; behind-the-scenes reflects that.
In the context of the market, it continues to realize that the OPEC+ group will not be stopped by price declines - the global crude oil benchmark Brent fell below $70 a barrel in early April and now only a few dollars exceed $60 - and will continue to plan to gradually relax its production cuts. However, the monthly report of S&P Global Commodity Insights shows that even if the group's output is expected to increase by about 140,000 barrels per day, OPEC+ output is essentially unchanged.
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After the surge in diesel futures prices, the benchmark rise first appeared on FreightWaves.