Key Takeaways
- • The DOE/EIA weekly benchmark diesel price rose 9.7 cents per gallon to $6.276/gal, per FreightWaves, remaining about 25 cents below the all-time high of $6.529/gal set September 22.
- • CME ultra low sulfur diesel (ULSD) traded near $4.9457/gal mid-morning Tuesday, close to the $4.9344/gal October 13 settlement, after a more than 21-cent jump on October 13.
- • Unconfirmed reports that Qatar and Pakistan had proposed new talks to end the Iran war pushed oil prices sharply lower Tuesday, underscoring how sensitive markets remain to Middle East headlines.
- • The Brent-ULSD crack spread has held in a relatively narrow 83-88 cents/gallon range for about a month, suggesting diesel strength has stabilized rather than continuing to widen.
- • A Phillips 66 Bayway refinery lockout of Teamsters members in New Jersey is not expected to affect prices, as operations were reported to be continuing normally.
Summary
After months of volatility, the diesel market appeared to calm heading into Tuesday, October 20, 2026, according to FreightWaves. The Department of Energy/Energy Information Administration weekly benchmark diesel price, used for most fuel surcharges, rose 9.7 cents per gallon to $6.276/gal. The price is effective Monday but was released Tuesday. The figure remains about 25 cents below the all-time high of $6.529/gal set on September 22, and it followed three weeks of declines before this week's increase.
In futures markets, CME ultra low sulfur diesel had moved into a lull following a more-than-21-cent increase on October 13. That rise was driven primarily by the market's realization that short-term measures, including the Trump administration's diesel deal with Russia, would have limited to no impact on supply and demand. The October 13 settlement was $4.9344/gal, and mid-morning Tuesday ULSD traded at $4.9457/gal.
Volatility returned shortly afterward as oil prices fell sharply. Multiple news outlets reported, without confirmation, that Qatar and Pakistan had jointly proposed new talks to end the Iran war. Those reports circulated Monday and pushed prices lower Tuesday. FreightWaves noted that the market's reaction showed how on edge it remains, since reports involving nations not directly part of the Middle East conflict were enough to move prices. Most other external news from the prior week had been increasingly discounted by markets. Reporting has not indicated any meaningful change in oil flows through the Strait of Hormuz, and the Russian diesel arrangement, though politically controversial in the U.S., is not seen as materially altering the supply-demand balance.
The crack spread between first-month Brent and second-month ULSD on CME has mostly ranged from 83 to 88 cents per gallon for about a month, with occasional spikes above 90 cents. FreightWaves characterized this as diesel remaining strong relative to historical differentials, but with the spread no longer widening.
Finally, Phillips 66 locked out Teamsters members at its Bayway refinery in New Jersey on Monday afternoon after their contract expired. According to news reports, operations are continuing normally, and FreightWaves stated the lockout should not affect prices, since a refinery can run for an indeterminate period without its full workforce before operations are impacted.
In futures markets, CME ultra low sulfur diesel had moved into a lull following a more-than-21-cent increase on October 13. That rise was driven primarily by the market's realization that short-term measures, including the Trump administration's diesel deal with Russia, would have limited to no impact on supply and demand. The October 13 settlement was $4.9344/gal, and mid-morning Tuesday ULSD traded at $4.9457/gal.
Volatility returned shortly afterward as oil prices fell sharply. Multiple news outlets reported, without confirmation, that Qatar and Pakistan had jointly proposed new talks to end the Iran war. Those reports circulated Monday and pushed prices lower Tuesday. FreightWaves noted that the market's reaction showed how on edge it remains, since reports involving nations not directly part of the Middle East conflict were enough to move prices. Most other external news from the prior week had been increasingly discounted by markets. Reporting has not indicated any meaningful change in oil flows through the Strait of Hormuz, and the Russian diesel arrangement, though politically controversial in the U.S., is not seen as materially altering the supply-demand balance.
The crack spread between first-month Brent and second-month ULSD on CME has mostly ranged from 83 to 88 cents per gallon for about a month, with occasional spikes above 90 cents. FreightWaves characterized this as diesel remaining strong relative to historical differentials, but with the spread no longer widening.
Finally, Phillips 66 locked out Teamsters members at its Bayway refinery in New Jersey on Monday afternoon after their contract expired. According to news reports, operations are continuing normally, and FreightWaves stated the lockout should not affect prices, since a refinery can run for an indeterminate period without its full workforce before operations are impacted.
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