Diesel prices will not be among the figures released this week by the Energy Information Administration as it recovers from a technology collapse.
According to an EIA official, the weekly benchmark diesel prices that serve as the basis for most fuel surcharges will not be released until late Wednesday, along with the EIA’s gasoline prices, which were also delayed due to technical concerns.
The EIA stated Wednesday afternoon that gasoline prices would be released at 5 p.m. EDT. It had previously stated that the carefully watched EIA Weekly Summary report would be released on time on Wednesday at 10:30 a.m. EDT. The statement, however, made no mention of diesel costs.
“No updates on diesel at this time except to state that we know it won’t be this week,” EIA spokesman Chris Higginbotham told FreightWaves in an email.
While weekly diesel and gasoline prices are generally posted late Monday, the number for next week is slated to be released on Tuesday owing to the Fourth of July holiday.
The EIA currently has a backlog of diesel prices for Monday, June 20, and Monday, June 27. Due to the Juneteenth holiday on June 20, the statistics for June 20 were supposed to be provided on June 21. However, Higginbotham has stated on many occasions that the price will go into effect on June 20 and that the EIA’s technological problems had no effect on its capacity to acquire the data utilized in the price.
The challenge is how billing is handled with the basis for gasoline surcharges in flux. One anonymous company informed its customers via email that it had been “communicating with settlements and we will be proceeding based on last week’s FSC rates.” Last week’s price of $5.718 a gallon would be the reference point.
Companies are expected to make modifications to their billing based on the updated data for June 20 and 27.
When those prices are announced for those days, as well as July 5, they will come in the midst of a market that has seen a considerable drop in futures and wholesale prices since June 13, but not in retail pricing.
On the CME commodity exchange, the price of ultra-low sulfur diesel (ULSD) is presently down 53.52 cents per gallon from its recent high of $4.5719 on June 16. The settlement on Wednesday was $4.0367 per gallon, a 16.27 cent loss on the day and a 3.87 percent drop.
Retail prices, on the other hand, have remained stubbornly “sticky.” According to the DTS.USA data series in SONAR, average national retail diesel prices have only declined to $5.82 per gallon since a recent high of $5.852 per gallon on June 22.
Futures markets fell on Wednesday following the release of a weekly EIA summary report — which, among other things, showed U.S. refineries operating at 95 percent capacity, the highest level since September 2019.
Even though there are other signals of waning demand, this rate of operation is placing a lot of fuel on the market. As an example:
- Product supplied for distillates, which is a proxy for demand for distillates such as diesel but not jet fuel, fell over 300,000 barrels per day (b/d) from the previous week to 3.568 million b/d. This figure is 359,000 b/d lower than the five-year average for the third week of June, excluding 2020 data. The five-year average for distillate demand last week was 3.927 million b/d. The figure for this year is 90.8 percent of that.
- Inventories, which have been driving up fuel prices for months, are beginning to level out. Distillate stockpiles in the United States are back above 30 days for the first time since the second week of January, at 30.6 days’ cover. Slightly a few weeks ago, the East Coast was suffering from extremely low diesel stockpiles; now, stocks for PADD 1, the government-designated statistical area that encompasses the East Coast, are just under 26.9 million barrels. They were at 18.8 million barrels just four weeks ago.
- There were several gloomy data in the report that were not immediately tied to diesel. The United States’ oil output has increased to 12.1 million barrels per day, the greatest amount since the final week of April 2020, when the pandemic began to grip the planet.
