Spot diesel prices are hovering near 2014 highs across major US trading regions, while California truck drivers are struggling with retail market prices unseen since just before the 2008 recession, according to federal data released Nov. 8.
S&P Global Platts assessed Los Angeles CARB diesel up 1.15 cents at $2.5571/gal and San Francisco CARB diesel up the same amount at $2.7271/gal. The San Francisco spot market price was the highest in the nation, and last higher at $2.7288/gal Oct. 8, 2014, after about three years of much higher outright prices.
The outright prices were close to seven-eight-year highs across the US spot markets that trade in bulk 25,000-barrel lots, with the benchmark Gulf Coast ULSD gaining 1.10 cents to $2.4076/gal Nov. 8.
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US Energy Information Administration price data released Nov. 8 showed a similar pattern at the retail level, with the weekly US diesel price up for the eighth straight week at $3.73/gal, while the regional prices were up or down slightly at $3.712/gal for the East Coast, $3.633/gal for the Midwest, $3.482/gal for the Gulf Coast, $3.833/gal for the Rockies and $4.371/gal for the West Coast.
All those regions were at or just one week removed from their highest retail prices since late 2014, except the West Coast at late 2012 levels.
California within the West Coast showed a 5-cent weekly gain at $4.701/gal, the highest since July 28, 2008, when it peaked at $4.781/gal right before the recession, according to the EIA data.
“Retail prices are out of control,” a California diesel and gasoline trader said.
Part of the rise was due to higher spot prices, especially in San Francisco, which has a 17-cent premium over Los Angeles, with few easy options to ship the California-specific diesel up the coast. The San Francisco premium was the highest in 10 years, except for a two-week period in early August and one day in 2015.
Taxes, logistics, profit, and other aspects account for the difference between spot and retail markets. Gasoline taxes have always been higher in California than other states, and CARB diesel is more costly to make, as it is a stricter grade introduced to curb environmental emissions in the 1990s. But other environmental programs introduced over the last decade, such as, cap and trade, in California have also widened the spot-to-retail price more than in other US regions.
