The good news at the pump this week is thin, but it exists. The bad news is that it’s parked next to a diesel market setting fresh all-time highs and a global oil supply that isn’t reaching anyone.
According to AAA data, the U.S. national average for regular gasoline slipped on both Sept. 22 and 23. The relief was measured in fractions of a cent. It didn’t stick. Regular sat at $4.47 yesterday before ticking up a penny to $4.48 today.
One penny sounds tolerable until you remember AAA’s national average is up roughly 50 cents over the last 30 days. Current prices sit within about 50 cents of the record $5.02 gallon that AAA recorded in 2022, after Russia’s invasion of Ukraine scrambled world fuel markets. For this time of year, AAA says prices are already at record levels, running nearly 75 cents above the previous seasonal highs of 2022 and 2023.
Diesel also fell for two straight days, and it’s even more of a technicality. A gallon averaged $6.53 on Sept. 22 and dropped to $6.51 by Sept. 24. Per AAA, that is still the highest nationwide average on record, reset again earlier this week. Anyone buying anything that moves through a diesel-powered supply chain, which is nearly everything, is paying for it.
U.S. Energy Information Administration data points upward. The EIA reported spot gasoline prices climbing 3.8 percent to 5.1 percent, the range varying by U.S. market, while heating oil, which tracks diesel, held flat.
Then there is supply. The Strait of Hormuz remains near a standstill, with shipping data showing just 10 percent of usual tonnage moving through this week. The Bab el-Mandeb Strait is under blockade. The U.S. has been drawing down its strategic petroleum reserves to hold prices in check, leaving them at their lowest since filling began in 1982. That is roughly a third of historic levels, never replenished after the 2022 spike.
With heating season arriving as temperatures fall, diesel demand is about to climb.
[Images: BP, Shell]
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