Pricing diesel in a falling market

If you don’t have diesel pre-purchased yet, when do you pull the trigger? In light of the current demand situation — hey there, global pandemic — one analyst says it may be prudent to hold off for a bit.

Let’s start with demand. Without a doubt, the global response to COVID-19 is having a huge impact on not just the price of oil, but the overall demand for all fuel products, diesel included, says Patrick De Haan, head of petroleum analysis with Gas Buddy.

Prices at retail have tanked in the last week, with the U.S. price sliding 10 cents a gallon and Canadian diesel prices falling even more with at least a seven-cent dip per litre.

It’s an eye-opening drop, De Haan says, and adds that if you buy diesel at retail, you may want to hold off a little longer.

There are a few hiccups on the supply side — a continuing strike at the Co-op Refinery at Regina, for one — but on the grand scheme of things, there isn’t any significant disruption for supply…yet.

Dropping ethanol prices have led to some plants being mothballed, and that’s not beyond the realm of possibility for some diesel production, De Haan says.

Listen below for the full interview between Patrick De Haan and RealAg Radio host, Shaun Haney: 

3 thoughts on “Pricing diesel in a falling market

  1. Personally, I don’t think fuel can go much lower. When farm fuel is trading in the mid 50 cents/liter, do you really want to hold off for a few more cents? To me, the risk is to the upside now. Remember, taxes forms almost 1/2 of that price and the refinery needs to make its fixed costs. They could get their feedstock for practically nothing (as we saw WCS trade under 6$) and the price would probably be close to where it is now. The unknown is another factor. What if Russia and Saudis make a deal? What if a major refinery has a catastrophic event. I may be wrong, but I’m pulling the trigger now.

  2. I never “price” fuel I just order it when I need some. Tuesday fuel dropped to 60 cents I told them to fill me up.

  3. Fuel was priced lower the 4th week of March than the 1st week of April at a local dealer …so there is no certainty …when do you fuel up?

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