ULSD (diesel fuel) price changes are highly correlated to oil prices, with the spread between the price change % of WTI and ULSD relatively tight. For the majority of the year, they have moved in tandem with oil prices (WTI) until just after oil prices spiked from the bombing of a large oil processing plant in Saudi Arabia (9/14-9/16). Since 9/18, a price % change divergence happened, increasing the price % change spread of ULSD to WTI to its highest level for the year.
As of 10/28 WTI oil was at $55, a 12% decrease since 9/16. As of 10/28, ULSD was at $2.05, a 5% decrease since 9/16. Despite all the geopolitical issues in the world—especially in the Middle East that could threaten the supply of oil and cause oil prices to increase—oil prices are not trending up at this time because of the dampened global demand. Unless the market sees signs of increased demand, oil prices should not increase. The biggest factor that could cause the price of ULSD to increase is the pending IMO 2020 mandate that goes into effect January 2020. However, at this time, the market doesn’t seem too concerned about prices increasing as the ULSD January 2020 futures contract is priced at $1.94.