The benchmark Department of Energy/Energy Information Administration weekly average retail diesel price rose for the 13th week in a row for the price posted Monday, up 2.2 cents a gallon to $2.738.
It is now up 36.6 cents from the level of Nov. 2, the last week that the price posted a decline.
The increase is now closing in on the territory of the largest increases in the history of the series that goes back to 1994. There were three comparable or greater increases to what is occurring now.
==June 14, 1999, through Oct. 4, 1999: The price went up 15 weeks, was flat for a week and then went up one more week
— Dec. 6, 2010, through March 14, 2011: 15 consecutive weeks of increases
— Feb. 22, 2016, through June 14, 2016: increases in 16 out of 17 weeks.
Even with the gains, the benchmark price of diesel still stands 21.8 cents less than where it was posted in the first week of February last year, at $2.956 a gallon.
Although oil markets were higher Monday on the CME commodity exchange, that sort of gain would not show up in retail prices on that day, when the EIA takes its survey of the market to get its weekly price. But commodity prices between Friday, Jan. 22, and Friday, Jan. 29, did rise 2.4 cents, roughly equal to the increase in the weekly retail diesel price.
Wholesale diesel prices, as seen in the ULSDR.USA data series in SONAR, also rose slightly during the week, climbing as high as $1.717 a gallon on Thursday before sliding back 60 basis points, up from $1.685 a gallon on Saturday, Jan. 23. (Wholesale prices are posted on weekends.)
One notable feature of the market: What’s known as a backwardation has developed. A backwardation in the market occurs when the spot price is higher than a price out in the calendar. On Monday, the 12-month spread between March 2021 ULSD barrels on CME and March 2022 barrels flipped into backwardation, the first time that’s happened since late January 2020. A backwardation is a sign of tightening inventories, and the ULSD market has been heading toward backwardation for weeks, in line with the backwardation seen in all crude and gasoline markets. On Monday, it finally happened in diesel.
More articles by John Kingston
Great commodity price surge not just about oil and may be impacting trucking
Diesel market in 2021: Something closer to normalcy likely on tap
Why the feared IMO 2020 spillover effect on diesel markets didn’t happen