Diesel Posts Highest Price and Biggest Increase in DOE/EIA Benchmark History

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HOUSTON — The benchmark diesel price the trucking industry uses to price fuel made history on Monday as markets went wild on a 24-hour rollercoaster ride.

And at a top industry meeting in Houston, the OPEC secretary general largely sidestepped the question of whether OPEC would add more oil to the market.

The Department of Energy/Energy Information Administration’s weekly retail diesel price rose 74.5 cents per gallon to $4.849 per gallon. This is the highest price in the history of the series, which dates back to the early 90s. The previous high was $4,764 on July 14, 2008.

It was the ninth consecutive week of increases. Meanwhile, the price rose $1.236 per gallon.

The increase was by far the largest in the history of the price, which was launched in 1994. Prices rose 30.8 and 34.6 cents per gallon in two non-consecutive weeks in September 2005, at the following the double whammy of hurricanes Katrina and Rita. These previous record increases have been left in the dust.

As the global market continues to shun at least 2 million barrels per day of Russian exports, the race is on to find supply elsewhere. At the S&P Global Commodities Insight CERAWeek conference in Houston, held in person for the first time in three years, OPEC Secretary General Mohammad Sanusi Barkindo of Nigeria dodged the question of whether his organization could put more barrels on the market.

Earlier in a press conference, Barkindo said that “no country or group has the capacity to maintain the balance”. He said OPEC is “monitoring these developments continuously” when asked if the organization might increase supply.

But he never committed to a statement that could be interpreted as “yes” or “no”. “We have to overcome this crisis,” he said. “We are working with other governments to play their own part in getting the world back on track.”

Barkindo at CERAWeek in Houston

He also said oil was “under siege”, with access to capital increasingly restricted as banks and other financial institutions moved away from lending to the oil industry, under various pressures.

Barkindo said oil markets “could be scary going forward.” But he wouldn’t say what’s happening with the Russian supply shock is the start of what he called the “eighth cycle,” after saying earlier in OPEC’s history dating back to the early 1960s, there had been seven “cycles”. ” price spikes or crashes.

Prices for ultra-low sulfur diesel on the CME commodity exchange jumped on Sunday afternoon US time, mostly on news that a full embargo on Russian oil was being considered. At some point shortly after the open, the ULSD rose to $4.22373 per gallon. If it had settled above $4, it would have been only one of five times in the history of the contract that it would have done so, all close to the record price of $4.11, recorded on July 3, 2008.

But prices fell from there, settling at $3.9215 a gallon, still a gain of 14.52 cents. ULSD on CME has now added around $1.07 per gallon in just six trading sessions.

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