In a significant development for fleet managers and diesel consumers, California’s CARB diesel prices have plummeted to their lowest levels in nearly 31 months. This shift in the market comes after a narrowing of Los Angeles differentials and a drop in the underlying Nymex ultra-low sulfur diesel (ULSD) contract last week.
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Key Highlights of the CARB Diesel Price Drop
Los Angeles Prices
As of August 2nd, the front-month outright CARB diesel prices in Los Angeles hit their lowest point since December 2021. This decrease follows a 4% downturn in the Nymex ULSD contract and a 2¢ per US gallon weekly dip in differentials.
San Francisco Prices
In San Francisco, overall ULSD liquidity remained muted, but the Nymex loss pressured a price drop that also reached the lowest mark since December 2021.
Production and Inventory
California refiners nearly doubled their CARB diesel production in the week ending July 26th, with an average of 193,000 barrels per day. This increase led to a 1.6% rise in the state’s total diesel inventory, reaching 2.9 million barrels. Interestingly, this boost in CARB diesel production occurred despite a 38% drop in the output of other diesel fuels, including high-sulfur and renewable diesel.
What Does this Mean for Fleet Managers?
Strategically navigating the fluctuating CARB diesel prices offers significant cost savings. Timing your refueling and stocking makes all the difference. Rebel Fleet’s tailored fueling programs help you do just that, keeping your fleet fueled for the best value and price.
- Cost Savings: The significant drop in CARB diesel prices could translate to substantial cost savings for fleets operating in California, especially those that rely heavily on diesel-powered vehicles.
- Strategic Refueling: With prices at a 31-month low, this could be an ideal time to refuel and lock in lower costs. Monitoring these trends closely will be crucial for maximizing savings.
- Market Volatility: The recent fluctuations underscore the importance of staying informed about market trends. With the Nymex ULSD contract influencing prices, fleets need to be prepared for potential changes in the coming weeks.
- Supply Considerations: The uptick in CARB diesel production is a positive sign for supply stability, but the concurrent drop in other diesel outputs highlights the dynamic nature of the market. Fleets should consider diversifying their fuel options or maintaining a flexible fuel procurement strategy to navigate these shifts.
The current dip in California CARB diesel prices presents an opportunity for fleet managers to reduce operating costs. However, with market conditions being highly fluid, staying updated and adapting to changes will be key to maintaining an efficient and cost-effective fleet. Are you ready to be a Rebel? Give Rebel Fleet a call today for all your fleet fuel needs.
