US diesel reaches record $6.30 per gallon — OilPrice
In the United States, the average price of diesel fuel reached $6.301 per gallon on Tuesday evening, while the average gasoline price stood at $4.355 per gallon. OilPrice reports, citing data from the GasBuddy service. The publication links the rise in fuel prices to oil prices climbing above $100 per barrel.
Record diesel prices
At the end of last week, the average price of diesel in the United States exceeded $6 per gallon for the first time. Patrick De Haan, GasBuddy’s head of petroleum analysis, said the price could reach $6.60 per gallon within several days and exceed the inflation-adjusted 2022 peak.
According to OilPrice, gasoline prices are the highest for this time of year, while record diesel prices could affect consumer spending and the economy. Diesel fuel is used in freight transportation and for heavy equipment, so its rising cost may increase businesses’ expenses for producing and delivering goods.
Market assessments
Chevron CEO Mike Wirth said market reserves have already been exhausted and oil prices may continue to rise over the coming months. According to him, it is difficult to imagine a scenario of a rapid price decline, while risks for the market remain tilted toward further price increases.
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OilPrice writes that the situation in the diesel fuel market is being complicated by the war in Iran and Russian aggression against Ukraine, which, according to the publication’s assessment, are limiting supplies of petroleum products from the Middle East and Russia. Chinese fuel exports have also not yet returned to significant volumes after several months of restrictions aimed at protecting domestic supply.
Oil inventories are declining
According to International Energy Agency data cited by OilPrice, global observed oil inventories fell by another 95 million barrels in August. Since February, the total decline has amounted to 507 million barrels, or an average of 2.8 million barrels per day. Volumes of oil in seaborne transit decreased by 65 million barrels amid new attacks on tanker traffic from the Middle East, according to the data.
The administration of US President Donald Trump calls the price surge temporary. Trump himself said prices would “fall like a rock” after the war in Iran ends. At the same time, OilPrice notes that increased production in Venezuela and expanded US refining capacity will not be able to quickly affect oil and fuel prices.
