Oil prices fall as Gulf crude flows near pre-war levels, diesel down 14.7 cents

Oil prices fell Tuesday as reports showed crude flows from the Persian Gulf nearing pre-war levels, pushing the weekly retail diesel price down 14.7 cents to $6.382 per gallon. It marked the first weekly diesel price decline in four weeks, ending a three-week streak of record highs.

JP Morgan reported that product exports from the Gulf remain only slightly above 50% of pre-war levels, while crude flows are closer to normal. ULSD futures on the CME settled at $4.6847/g on Friday after falling from a September 16 high of $5.262/g, then rebounded Monday and Tuesday as the October contract neared expiration. Texas Governor Greg Abbott issued a disaster proclamation allowing dyed diesel for on-road use and requested a temporary EPA waiver on ultra-low sulfur diesel rules.

Prior to this week, diesel prices had risen for three consecutive weeks, reaching new all-time highs each week. The September 16 ULSD futures settlement had marked a recent peak of $5.262 per gallon. Oil markets had been pressured by concerns over Iran’s ability to restrict flows through the Strait of Hormuz.

What we know

The latest average weekly retail diesel price was $6.382/g, down 14.7 cts/g.
It’s the first decline in four weeks and ends the three-week streak that saw the price hit new all-time highs each week.
Oil flows out of the Persian Gulf were getting close to pre-war norms.
JP Morgan also said product exports are only slightly above 50% of the pre-war figures.
Over in the futures market, since a recent high settlement of $5.262/g on September 16, which also was the highest settlement since the Iran war began, ultra low sulfur diesel (ULSD) on the CME sank to a settlement of $4.6847/g Friday.