Diesel fuel prices surged Monday as oil markets reacted to weekend news of a drone attack on Saudi Arabian oil facilities that took an estimated 50% of the country’s production offline.
“Before the Sept. 14 drone attacks on Saudi oil facilities, the outlook for diesel prices was looking favorable for harvest needs,” DTN Lead Analyst Todd Hultman said on Monday.
“Diesel was priced at $2.86 a gallon in the Midwest, down 10% from this time a year ago. On Monday after the attacks, however, diesel futures are up nearly 10%, unfortunate timing for grain producers getting ready to begin harvest, possibly in the next two to three weeks,” Hultman said.
The latest Energy Information Administration data showed U.S. distillate fuel inventories were at 136.2 million barrels (bbl) on Sept. 6, which was down about 3.1 million bbl, or 2.2%, from a year ago and about 6% below the five-year average for the same time of year.
“Even if there are no further attacks on oil facilities, fuel prices are now likely to carry a more expensive price tag through the 2019 harvest and into winter,” Hultman said.
NYMEX October ULSD futures rose 20.6 cents, or 11%, Monday to settle at $2.0838 per gallon, a near-four-month high on the spot continuation chart.
Alton Wallace can be reached at firstname.lastname@example.org