Just when it looked like fuel prices would keep going up forever, the market changed.
The average retail weekly gasoline price, which most fuel fees are based on, has been going down, and the figures from the Department of Energy/Energy Information Administration show this trend. The price per gallon is now $4.586, which is 4.7 cents less than it was before.
This is the first week since July 3 that prices have gone down. Since then, prices have gone up 11 times, with the biggest increase being 22.2 cents per gallon.
The end numbers for this rise are as follows: from July 3, when the price per gallon was $3.767, to last week, when it was $4.633, the DOE/EIA reported an increase of 86.6 cents per gallon.
Diesel Futures Decline Amid Refinery Repair Plans
When the new DOE/EIA price came out, ultra low sulfur diesel futures dropped by 4.4 cents a gallon and settled at $3.2622. The highest price for ULSD on the CME commodities market was $3.4815 per gallon on September 14. It has gone down by 21.93 cents since then. Monday was the worst day for the market since September 7.
At the same time that prices are going down, plants all over the world are starting their yearly repair plans. As proof, look no further than the most recent EIA weekly data report, which showed that the country’s refineries were only being used 91.9% of the time. This was the lowest rate since the end of June. (And a June 30 rate of 91.1% reported for the last week of June seems to be an outlier; it is right in the middle of a string of rates well into the 93%-94% range, and sometimes even higher.)
Anticipating Diesel Price Surge Amid Global Refinery Maintenance and Export Restrictions
Energy Aspects’ monthly middle distillates report, on the other hand, says that some people are already looking forward to Monday, September 25, when maintenance season will be over. Diesel is a product that has been transesterified.
In the world of oil and diesel, there’s a lot of moving parts, and a lot of smoke and mirrors. But one thing’s for sure – the price of diesel is set to keep on rising. Russia’s export ban on diesel is just the tip of the iceberg. Meanwhile, refineries around the world are going into maintenance mode, leaving less of the precious fuel to go around. And China’s export restrictions are adding fuel to the fire.
Predicted Softening of Diesel Prices Amid Increased Refinery Runs and Capacity Startups
Energy Aspects also states that cracks are expected to soften once the majority of the maintenance is completed. The user states that refinery runs will increase significantly month by month starting from November. However, they anticipate that the real bearish pressure will not occur until the first quarter of 2024 due to capacity startups in regions east of Suez, which include South Asian countries like India and other parts of Asia.
Energy Aspects says that the breaks show how the magazine thinks diesel prices will change in relation to oil prices. In that way, Diesel’s fall may be seen. When comparing prices from one month to the next, the difference between ULSD and Brent futures on CME has gone down from a high of around $1.25 per gallon on September 14 to $1.04 per gallon on Monday.
Predicted Softening of Diesel Prices Amid Increased Refinery Runs and Capacity Startups
Analysts who think the market is getting close to a high and those who think it is running out of steam keep arguing about where the price of gasoline is going.
Since September 14, the price of a barrel of Brent has been stuck between $94 and $96. This has stopped the steady rise in Brent prices. Over the past three business days, the price of a barrel has settled at $93.30, $93.27, and $93.29. It hasn’t changed much.
Christyan Malek, who is the head of energy stocks research for Europe, the Middle East, and Africa at JP Morgan, wrote a paper on Monday that suggested the recent rises in Brent could be the start of a trend that raises prices to $150 per barrel by 2026.
JP Morgan’s Forecast on Supply-Demand Gap and Brent Crude Oil Price Fluctuations
JP Morgan, which keeps an eye on the market, says that there will be a gap between supply and demand of 1.1 million barrels per day in the next year. However, if drilling isn’t funded, that gap could grow to 7.1 million barrels per day by 2030.
JP Morgan was said to have said earlier this year that the price of a barrel of Brent crude oil would not go above $100. Since mid-June, however, the OPEC+ group and Saudi Arabia have cut back significantly, which has caused the price of Brent to go up by almost $22 per barrel.
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