The benchmark price used for most fuel surcharges saw an increase this week, signaling a positive trend that the broader markets anticipate will continue to rise. The Department of Energy/Energy Information Administration reported a 1.2 cents/gallon rise in the average weekly retail diesel price to $3.739/gallon, marking the fourth increase in the last five weeks. This increase comes after a slight decline in prices the previous week.
Despite market forecasts indicating an oil surplus in the second half of 2025, the OPEC+ group recently decided to increase oil supply by adding 548,000 barrels/day back into the market in August. This decision was unexpected as analysts were anticipating a smaller increase of 411,000 b/d, which has been the trend for the past few months. The OPEC+ group, which includes OPEC and non-OPEC oil exporters led by Russia, has been gradually increasing output after implementing cuts in 2023.
The International Energy Agency (IEA) reported that oil markets appear to be well supplied in 2025, with global oil demand expected to increase by 720,000 b/d this year. The recent increase in oil supply from OPEC+ did not deter market prices, as ultra-low sulfur diesel on the CME commodity exchange rose to $2.4211/gallon. However, prices have not reached the highs seen during the conflict between Iran and Israel in mid-June.
In response to the strong market conditions, Saudi Arabia announced an increase in its price formula for August sales. The Saudi crude pricing, calculated against key benchmarks like Brent for European sales and a basket of crudes in the U.S., is closely monitored by the market as an indicator of demand strength.
Overall, despite the unexpected increase in oil supply from OPEC+, market prices remain steady with slight increases in crude and diesel prices on the CME exchange. The market continues to monitor supply and demand dynamics closely to gauge future price movements.
