A recent FreightWaves article highlighted a sharp decline in diesel prices while industry analysts simultaneously warned about the possibility of tightening diesel inventories and emerging "tank bottom" conditions. In other words, the market is sending mixed signals.
For wholesale fuel buyers, this creates a familiar challenge:
Should you buy today or wait until tomorrow?
The answer isn't always obvious.
Many buyers watch crude oil, diesel futures, or industry headlines. But wholesale rack prices often move differently than expected. Regional supply conditions, replacement costs, transportation constraints, and local market dynamics can all influence what suppliers charge.
That's why FuelProphet focuses on one thing: helping buyers make better purchasing decisions before rack prices change.
What Happened Last Week?
During the week of June 2–5, FuelProphet's reports identified major directional shifts in the diesel market.
On June 3, FuelProphet projected diesel rack increases of approximately 13 cents per gallon and advised customers to lift product before higher prices became effective.
Just one day later, the model detected a significant reversal.
On June 4, FuelProphet projected diesel rack declines ranging from 13 to 23 cents per gallon across key regions and advised customers to wait before purchasing.
The following day, FuelProphet continued to signal lower diesel pricing and again recommended waiting.
At the same time, FreightWaves reported that benchmark diesel prices had fallen sharply to their lowest levels in months, while analysts debated whether future supply concerns could eventually reverse the trend.
Headlines Don't Tell You What To Do Tomorrow
The FreightWaves article illustrates a common problem for fuel buyers.
You can read an article that warns of tighter supplies.
You can hear analysts discussing future shortages.
You can see crude oil moving higher.
Yet wholesale rack prices may still move lower tomorrow.
That's why FuelProphet exists.
Our subscribers don't receive hundreds of charts or pages of market commentary.
They receive a simple recommendation:
Lift
Wait
Neutral
Combined with projected rack price movement for the next pricing cycle.
What Could This Mean Financially?
For an 8,500-gallon transport load, every 10-cent-per-gallon move represents approximately $850 in cost difference.
When diesel markets swing 15 to 20 cents in just a day or two, timing matters.
A single well-timed purchasing decision can generate savings that exceed the cost of a FuelProphet subscription many times over.
The Bottom Line
The diesel market remains volatile.
As FreightWaves noted, today's declining prices can coexist with tomorrow's supply concerns.
The challenge isn't understanding what happened yesterday.
The challenge is deciding what to do next.
FuelProphet has helped wholesale fuel buyers navigate these market swings for more than 20 years by providing actionable rack-price guidance designed specifically for buyers making real purchasing decisions.
Want to know where wholesale fuel prices may move next?
Start your free 14-day FuelProphet trial today and receive twice-daily rack price guidance delivered directly to your inbox.
Number used for most fuel surcharges is down to its lowest level since mid-March, soon after start of Iran hostilities
·Tuesday, June 02, 2026
The benchmark diesel price is at its lowest level since March. (Photo: Jim Allen\FreightWaves)
The benchmark diesel price used for most fuel surcharges is now down to a level not seen since a few weeks after the military confrontation between Israel and the U.S./Israel coalition began.
The Department of Energy/Energy Information Administration average retail diesel price fell 17.3 cents/gallon to $5.35/g. It’s the lowest price since March 23, when prices were surging following the start of hostilities between the two sides. On that date, the DOE/EIA price was $5.375/g.
The price was $3.897/g on March 2, in the last number published just as the war was beginning two days before that date.
Second-biggest drop
In this highly volatile market, the 17.3 cts/g decline this week was only the second biggest weekly fall. Only on April 20, soon after the ceasefire was announced, did the benchmark record a larger decline than this week, sliding 20.5 cts/g.
The volatile market can be seen in some of the regional diesel prices published Tuesday, effective Monday, for various parts of the region. While the U.S average was down 17.3 cts/g, it was only down 6.8 cts in New England and 7.7 cts/g in the West Coast excluding California. Meanwhile, the price fell 23.1 cts/g in the Midwest, which had been affected by refinery issues that are now largely fixed.
That volatility could be a reason why the DOE/EIA price and the average daily price of the AAA were so different for Monday, the effective day of the DOE benchmark. The AAA price for Monday was $5.448/g, almost a full 10 cents more than the DOE/EIA price.
The drop in the benchmark comes against a background of a decline in the price of ultra low sulfur diesel (ULSD) on the CME commodity exchange as talk of some sort of peace deal and a reopening of the Strait of Hormuz have been the key focus of traders.
From a settlement of $4.1625/g on May 19, ULSD fell to a settlement Friday of $3.4886/g, a decline of more than 67 cts/g.
Recent reversal
But as has happened so many times in this up and down market that waits on every development regarding a reopening of the strait, the trend in commodity markets the last two days has been solidly upward.
ULSD for July delivery–that month is now the front month contract on the CME–rose more than 15 cts/g between Friday and Monday after a weekend of news reports that suggested peace and a reopening of the international waterway was becoming less likely, not more.
In trading Tuesday, prices pushed up again, though at a slower rate. At approximately 10:40 a.m. EDT, ULSD was up 2.23 cts/g to $3.6617/g.
Execs seeing a tipping point
The overall downward trend in prices is occurring even as two leading oil market executives last week, at the Sanford Bernstein 42nd Annual Strategic Decisions Conference in New York, put forth a scenario for the coming weeks that was anything but bearish.
There have been analyst discussions recently of a term known as “tank bottoms.” It’s essentially the minimum level of inventories needed for the oil system to operate. It doesn’t mean inventories go to zero, but they are down at a level where to pull on them further could cause operational issues.
Chevron CEO Mike Wirth was interviewed by Bob Brackett of Sanford Bernstein. Wirth didn’t use the term “tank bottoms,” but Brackett did.
Wirth noted that global inventories at the start of the war were at extremely high levels. Those stocks served as a buffer from the lost supply out of the Strait of Hormuz, which he estimated at about 12 million to 13 million b/d out of a global oil market of just over 100 million b/d.
“You’ve got all this inventory that sits in between the ins and the outs, and that has been able to buffer the pressure,” Wirth said.
But then he warned: “The buffers and the shock absorbers are being steadily drawn down and the ability for the market to absorb this imbalance is drastically diminished today versus where we started.”
Neil Chapman, a senior vice president at ExxonMobil, echoed a similar sentiment.
“We’re approaching unheard of inventory levels,” Chapman said, also in a fireside discussion with Brackett. “I mean, really, really low levels. You can debate whether that’s going to hit those really low levels in 2 weeks or 3 weeks. But once you get to that point, then you’ll see prices shoot up.”
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