Fuel Costs Fluctuating                               

The diesel market is getting weaker. The DOE/EIA’s main diesel price has gone down for three weeks in a row. It’s now at $3.768 per gallon, lower than the $3.865 on July 8. Before this, prices went up for four weeks. That rise came after nine weeks of falling prices.

Why are prices falling now? There are a few reasons. First, there’s plenty of diesel in storage. Also, not many people are buying it right now. John Kemp from Reuters says this is why the market is soft. He points out that U.S. stocks of oil and fuels like diesel are close to normal for this time of year.

The future market for ultra low sulfur diesel (ULSD) is also showing this trend. Last week, it ended about the same as it started, even though it went up a bit at first. On Monday, ULSD closed at $2.375 per gallon. This is the lowest it’s been since June 7.

The market has changed from “backwardation” to “contango.” In simple terms, this means there’s enough supply now. It’s different from the tight supply we saw in recent months. However, things could change. For example, if Russia bans diesel exports, it could shake up the market.

At TLC, we’re keeping a close eye on these changes. We want to give you the best logistics and supply chain solutions. Want to know more? Get in touch with our team for advice on how to handle this changing market!

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