Trump Rejects Diesel Export Ban Amid High Fuel Prices and Market Volatility

Fuel and agriculture markets remain under close watch following a volatile week in commodities. The national average for gasoline and diesel fell last week as crude oil prices cooled, but costs at the pump are still the highest ever for this time of year, just weeks before the midterm elections. President Donald Trump ruled out a U.S. ban on diesel exports, reversing course just days after saying it was under consideration. Both Republicans and Democrats have pushed for a diesel embargo, while oil industry groups strongly oppose the idea.

Globally, China’s suspension of petroleum product exports in October added pressure to energy markets. Meanwhile, the Group of Seven nations agreed to release 100 million barrels of crude oil and diesel reserves over four months to ease supply strains, including a substantial diesel release within the first 20 days by G7 members and partners. 'Diesel was stuck in a game of policy ping-pong,' noted No Bull Ag’s Susan Stroud in a client report.

Ag and oil groups are advocating for a national waiver to allow off-road farm diesel on highways, which could help ease prices. Several states have already taken action to permit the use of this fuel on roads. Off-road diesel, which is essentially the same as standard ultra-low sulfur diesel but dyed red, is exempt from a federal excise tax of 24.4 cents per gallon.

The Agriculture Department will release its October crop estimates on Friday, following a surprise report showing larger-than-expected domestic corn supplies. That report sent corn prices lower and weighed on soybeans, which were already under pressure after President Trump’s meeting with Chinese President Xi Jinping failed to strengthen China’s commitments to buy U.S. soybeans.