Streak is over: DOE/EIA diesel price declines

The benchmark Department of Energy/Energy Information Administration diesel price fell Monday for the first time in more than 12 weeks, even as wholesale and commodity prices last week soared after a Monday collapse.

A decline of 0.2 cents a gallon to $3.342 in the DOE/EIA price ended a streak of 12 consecutive increases. It marked the first decline in 14 weeks, as the price the week prior to the start of the 12-week increase was unchanged from the prior week. 

With the streak over, the impact can be added up: a price that is 22 cents higher than when it started. The price just before the streak was $3.124 a gallon, and it peaked last week at $3.344. 

The current price is 91.5 cents more than it was a year ago and 30.8 cents more than it was two years ago.

The latest increase in the DOE/EIA price comes as wholesale and commodity prices on Monday were significantly higher than they were a week ago, due to the volatility of the market last week. 

Oil prices on Friday plummeted, with the ultra low sulfur diesel price on the CME commodity exchange declining 12.81 cents a gallon, or 6.06%, primarily on the news that the OPEC+ group would be increasing output in August after earlier in the month having failed to do so. 

But from that point on last week, prices added back all of that decline and more. On July 16, ULSD on CME settled at $2.1133 a gallon. The decline on the following Monday, July 23, dropped it down to $1.9852 a gallon. But the steady gains over the course of the week brought prices back to a Monday settlement of $2.151 a gallon.

The result was a significant bounceback in wholesale diesel prices, as reflected in this chart from the wholesale ULSDR.USA price. On Tuesday, the day after the OPEC+-driven decline, national average wholesale diesel prices dropped to $2.1621 a gallon but rose to $2.304 by Monday.

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Retail prices do not always follow wholesale prices in the short term, as last week demonstrated perfectly. The movement in the DTS.USA average national retail diesel price barely budged around the $3.277 level even as wholesale prices were volatile. That lack of movement in the DTS.USA price was reflected in the small downward move of the DOE/EIA price. 

The 12-week streak of increases was one of the longest in the history of the weekly DOE/EIA price, published since 1994. The 20-week streak that began last November was the longest, and there have been two 15-week streaks earlier in its history. There also was a streak during which the price went up 19 of 20 weeks. 

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