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Russian Diesel Purchase Fails to Move Markets as ULSD Remains Volatile

A controversial diesel procurement deal with Russia has done little to influence ultra low sulfur diesel futures pricing, industry observers said Wednesday. ULSD futures settled Monday at $4.7232 per gallon with minimal decline despite extensive promotion by the Trump administration. The energy market has remained prone to sharp swings since military action commenced in March between the U.S. and Israel against Iran. Tuesday trading showed ULSD moving between highs and lows spanning approximately 17 cents per gallon. The deal has drawn criticism from congressional members who questioned its legality. A separate proposal permitting red dye diesel for over-the-road use has stalled in regulatory review. AAA data showed national average retail diesel prices completed a 17-day decline through Friday before stabilizing Tuesday. Uncertainty surrounding Strait of Hormuz oil shipment volumes continues to drive market volatility.