The benchmark U.S. diesel price used for most fuel surcharges dropped for the fourth straight week on Monday, reaching its lowest level since December 2024.
According to the Department of Energy and the Energy Information Administration (DOE/EIA), the average price of diesel fell 1.7 cents to $3.497 per gallon. The price has declined by 14.2 cents over the past month. Though published on Tuesdays, the DOE/EIA price is based on Monday’s market data.
The continued drop in diesel prices comes as global oil markets react to the possibility of a market share battle among major producers. Analysts say an increase in supply could flood the market and weigh down prices further.
Ultra-low sulfur diesel (ULSD) futures on the CME commodity exchange also dropped sharply. On Monday, ULSD settled at $1.9598 per gallon—the lowest level since May 2021—after falling over 15 cents in just six trading sessions. Some of that drop was due to the transition from the May to the June contract, but the bulk of it reflected broader market pressures.
Despite the decline, prices saw a small recovery Tuesday morning, with ULSD rising by more than 5 cents to $2.0287 per gallon by 11:30 a.m.
The recent pressure on fuel prices is largely driven by OPEC+ decisions. The group, which includes OPEC members and allies like Russia, agreed over the weekend to raise production quotas for June, accelerating the easing of previously agreed output cuts.
S&P Global Commodity Insights reported that eight OPEC+ countries will increase output by a combined 411,000 barrels per day starting in June. Together with earlier quota increases in April and May, the group has now added nearly 960,000 barrels per day back to the market, out of the 2.2 million barrels per day they had initially cut.
OPEC cited “healthy market fundamentals” and tight global inventories as the reason for boosting production. But analysts suggest deeper motivations. According to reports from Axios, Saudi Arabia may be aiming to strengthen ties with former President Donald Trump by helping to drive down oil prices.
Others believe the kingdom is frustrated with OPEC+ members that are not sticking to agreed production cuts. “Saudi Arabia no longer wants to carry the heaviest burden while others in the group fall short,” said Richard Bronze, head of geopolitics at Energy Aspects, in a statement to The New York Times.
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