U.S. Rack Diesel Drops 25.71cts Despite Oil Rebound


   
Miguel E. Andujar
DTN Refined Fuels Market Reporter

   DAVENPORT, FL (DTN) -- U.S. wholesale rack prices for ultra-low sulfur 
diesel (ULSD) and gasoline fell sharply Thursday (11/5), extending this week's 
weakness despite a recovery in crude oil and refined product futures as 
uncertainty surrounding the Middle East conflict continued to influence 
petroleum markets.

   Nationwide ULSD rack prices dropped 25.71cts, or 5.1%, to $4.7360 gallon 
from Wednesday's revised $4.9931 gallon, according to DTN data. Conventional 
unleaded gasoline declined 18.93cts, or 6.4%, to $2.7755 gallon from $2.9649 
gallon.

   Oil futures recovered some of their recent losses as the market reassessed 
expectations that Democratic victories in the U.S. midterm elections could 
accelerate diplomatic efforts to end hostilities involving Iran. Reports of 
additional tanker incidents and the possibility of further military action kept 
supply risks in focus, limiting confidence in a near-term resolution.

   WTI futures advanced $1.44 to $89.54 bbl, while NYMEX ULSD increased 7.41cts 
to $4.2806 gallon. RBOB gasoline climbed 5.37cts to $2.7823 gallon, reversing 
part of the recent decline in refined product futures.

   Refining margins also improved, with the diesel crack rising $1.71 to $90.24 
bbl. However, the spread remained well below the $100 bbl threshold exceeded in 
late October, reflecting a substantial retreat in diesel refining economics 
over the past two weeks. The gasoline crack increased $0.83 to $27.31 bbl.

   Despite the futures recovery, ULSD rack prices declined across all five 
PADDs, led by the Midwest, where prices plunged 34.21cts to $4.7136 gallon. 
Gulf Coast diesel fell 30.72cts to $4.6096 gallon, while West Coast prices 
dropped 28.85cts to $5.2099 gallon. East Coast ULSD declined 13.46cts to 
$4.5501 gallon.

   Gasoline racks also weakened nationwide, with West Coast prices posting the 
largest decline, down 20.04cts to $3.4063 gallon. Gulf Coast gasoline fell 
19.8cts to $2.5813 gallon, followed by the East Coast, where prices dropped 
18.92cts to $2.7044 gallon.

    




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