Trump's moves to boost diesel supplies have not yet lowered prices
USO•US diesel prices reached $6.28 a gallon on Thursday, up 70% since the US-Israeli war on Iran began. The administration's emergency oil release and red-dyed diesel measures have not yet brought prices down.
1. Prices remain elevated
US diesel prices are near record highs despite the administration's efforts to increase supplies. The G7 agreement to release 100 million barrels of oil and petroleum products appears largely to cover barrels remaining from a March emergency release, while the White House said it arranged for those previously committed barrels to be released sooner and with a focus on diesel.
2. Limited uptake of dyed fuel
An executive order allows red-dyed, tax-exempt diesel on public roads through year-end, but retailers and fuel marketers have been wary because of tax uncertainty, logistics and potential fines when trucks cross state lines. The federal highway tax is 24.4 cents per gallon, and the savings are relatively small with diesel above $6 a gallon.
3. Global supply pressures
Analysts said global supplies of refined fuels remain tight as conflicts disrupt energy flows and refining output. Bob McNally said a durable end to conflicts in the Arabian Gulf and between Russia and Ukraine could put oil prices on a sharp downward trajectory; Caspian Conran characterized the measures as short-term steps that could provide probably a few weeks of relief.
