US Diesel Hits Record $6.31 While WTI Futures Settle Near $98
US retail diesel prices hit a record $6.31, up 68 percent year-over-year. This signals a refining shortage that crude oil charts fail to capture.
Key points
- US diesel prices hit a record $6.31, up 68 percent year-over-year, signaling a severe refining shortage.
- The crack spread exceeds $100 per barrel, far above the normal $20 to $40 range, indicating constrained supply.
- Real interest rates are projected to rise to 1.6 percent in 2027 as inflation expectations decline, impacting gold.
US retail diesel reached a record high of $6.31 on September 16. The price rose 68 percent from one year ago to reach this level.
Crude oil prices increased by only 52 percent over the same period. This gap reveals a significant refining shortage rather than a crude supply deficit.
Refining capacity drives the price gap
The crack spread sits above $100 compared to a normal range of $20 to $40. This indicates that refining constraints are the primary driver of current fuel costs.
Russian diesel exports collapsed from 800,000 to 50,000 barrels daily. US East Coast distillate stocks also reached record lows ahead of the heating season.
Diesel prices remain elevated despite headlines about pipeline restarts. The shortage stems from physical refining capacity that infrastructure upgrades cannot quickly fix.
Real rates shape gold pricing
The Fed projects a median funds rate of 4.1 percent for 2027. Inflation is not expected to return to 2 percent until 2029 according to their data.
The real policy rate rises from 0.7 percent to 1.6 percent in 2027. This increase occurs without further nominal hikes because inflation projections decline over time.
WTI decline masks contract roll effects
WTI futures showed a 7 percent decline in recent trading sessions. This drop largely reflects the contract roll from October to November positions.
The October contract settled at $100.30 before expiring. The November contract trades near $93.50, creating a visible price gap between the two.
