Benchmark diesel falls against as oil market selloff picks up steam

Core Insights - The benchmark diesel price has been declining for four consecutive weeks, with the latest average retail price at $3.607/gallon, down 5.8 cents from the previous week, totaling a decline of 26.1 cents over this period [1] - The ultra low sulfur diesel (ULSD) futures price has dropped significantly, settling at $2.1286/gallon, a decrease of 5.2 cents from the previous day and down nearly 21.2% from a recent high of $2.7011/gallon [2] - Current retail diesel prices are still relatively high compared to earlier in the year, with the latest price only slightly above the $3.571/gallon recorded on June 16, marking the lowest price since then [3] Market Dynamics - The decline in petroleum prices is influenced by potential geopolitical developments, such as a possible truce in the Russia-Ukraine war, but the more significant factor appears to be forecasts indicating a supply-demand imbalance that could lead to a glut by 2026 [4] - Both Brent and WTI crude oil prices have fallen below $60/barrel for the first time since February 2021, with WTI at $55.27 and Brent at $58.92, indicating a bearish market sentiment driven by supply concerns [5] - The International Energy Agency's recent monthly report, while less pessimistic than previous ones, still highlights a substantial imbalance in supply and demand projected into 2026, reinforcing concerns about future market conditions [6]