Benchmark diesel price turns higher as futures price rises

At the back of the increase in the future contract prices for diesel, which rose more than 13 cents/gallons in less than two weeks, the standard price used to determine most of the additional fuel fees on Monday for the second time in only nine weeks.

The average retail price in Energy/Energy Management increased by 2 CTS/G to $ 3.471/g. It rises the price from its previous week, which was a milestone: the price of June 2 was the least since September 2021.

The increase, announced by DOE/EIA, on Tuesday morning, was the second increase in the past nine weeks. These low prices with measurement began at $ 3.639/g are on April 7, so that the last price still decreases 16.8 CTS/G during this extension.

Oil prices generally rise in the last trading. Brent raw, the global raw standard, settled at $ 60.94/barrel on May 29. Five of the next seven days rose to settle on Monday at $ 65.29. The increases were continuing on Tuesday. At approximately 10 am, Brent rose by another 2 % to $ 66.65/b.

The future prices of the ULSD, which have been late in recent weeks, have strengthened a little more than Brent during that period, while facing approximately 2 CTS/G in a spread between the ULSD and Brent price.

market analysts refer to hidden trade talks between the United States and China, and the possibility of avoiding equal trade war, as reasons for joy.

The issue of the bear depends on the expectations of agencies such as the International Energy Agency, which may be struggled by global demand for oil in order to add up to one million b/d this year, which is a historical low number. This is associated with the OPEC+ design to continue the discounts in the output that was valid since the spring of last year, despite the offer/demand models that seem to indicate that this supply will disturb the market while increasing the weak expectations of the demand this year.

The other side indicates the market structure and backward communication.

In a completely balanced market, the price of oil to move forward – or any commodity – with the calendar. The July market for ULSD, the first month that is currently trading, will be less than August, August will be less than September, and so on. The structure is called Contango and reflects the increasing price of storage and the time value of the money.

The opposite is the decline, as the price of the closest month is the highest price. The following month is less than that, the next month is less. This structure reflects the fact that the closer barrel is the most valuable due to narrow stocks.