US Diesel Prices Surge Amid Global Supply Tightening

Diesel prices have surged as harvest begins across the country. The national average on-highway diesel price reached $6.285 per gallon, up more than $2.50 from the same week last year.

Farmers are feeling the pinch due to higher fuel costs, which are compounding on already tight budgets. Even with projected improved crop revenues, increased production costs continue to keep major row crops below breakeven.

Crude oil prices have increased about 14% since the beginning of September, while inventories remain low. Diesel prices reflect refinery capacity, inventories, and demand for the finished product, making them more volatile than crude oil prices.

The US distillate inventories provide little cushion against market disruptions, with stocks falling from approximately 127.2 million barrels in January to 109.4 million barrels in June, a decline of nearly 18 million barrels or about 14%.