Where Are Diesel Prices Headed

Abstract

A recent farmdoc daily article (August 28, 2015) examined the relationship between Brent crude oil prices and U.S. average gasoline prices at the pump. The historical relationship indicated U.S. gasoline prices should be about $2.00 per gallon, but remained stubbornly above $2.60 per gallon. It was argued that the gap between predicted and actual gasoline prices could be traced to the improving U.S. economy and sharply lower crude oil prices, which, in combination, have spurred gasoline demand and pushed the production capacity of the U.S. refining industry to the limit. The purpose of today’s article is to extend the analysis to U.S. pump diesel prices.