Even if a diesel export ban is not implemented, the talk of it in recent days on Wednesday accomplished its goal of reducing prices, at least in the futures market.
Ultra low sulfur diesel (ULSD) on the CME commodity exchange fell Wednesday by 16.57 cents/gallon, a decline of 3.35%, to $4.7764/g. It's the lowest settlement since September 8, not all that long ago which speaks to the huge increase in the middle of the month that saw the futures price hit its all-time high settlement September 23 at $5.2465/g.
But something else came with that decline in the price of ULSD: a surge in the futures price of RBOB, an intermediate product that serves as the price marker for gasoline in futures trading. It rose 9.95 cts/g to $3.587/g, an increase of 2.85%. It's the highest settlement since July 23, and before that is the highest settlement since a run of settlements above $3.60/g in the first half of May.
It is that reaction to a possible diesel ban that has been raised by critics of the potential policy, of which there are many. A Wall Street Journal editorial criticizing a possible export ban was titled "Republicans are Running on Empty."
The market reaction Wednesday came a day after Pr...