Benchmark diesel price declines after four weeks of increases

Core Insights - The benchmark diesel price has decreased after a four-week increase, with the Department of Energy/Energy Information Administration reporting a decline of 3.7 cents per gallon to $3.831/g [1] - The diesel price surge relative to crude was attributed to sanctions against major Russian oil companies and tight global inventories [4] Price Movements - The average weekly retail diesel price fell from $3.868/g to $3.831/g, marking a decline after a previous increase of 24.8 cents [1] - The spread between ultra low sulfur diesel (ULSD) and crude benchmark Brent has narrowed from $1.1561 cents/g to 89.73 cents/g [2] Market Dynamics - The recent high spread of approximately $1.15/g was the highest since September 2023, indicating significant market volatility [3] - The market has shifted from a focus on sanctions to discussions of a peace plan in the Russia-Ukraine conflict, which may influence future price movements [5] Inventory and Contract Structures - The spread between first and second month ULSD contracts has begun to narrow, suggesting a potential increase in inventories [5] - The market has been in a backwardation structure, where front month prices are higher than subsequent months due to tight inventories [6] Spread Fluctuations - The spread fluctuated significantly, moving from negative 7.64 cents/g to negative 4.22 cents/g over several days, indicating changing market conditions [7]