US diesel below $6 a gallon at 2-month low on easing tensions, weaker demand

US diesel prices fell below $6 a gallon ​on average on Saturday after two months ​above that threshold, retreating from record highs ‌as easing ​geopolitical tensions and seasonal demand weakness reduce pressure on fuel markets. Diesel had surged as the US-Israeli war against Iran disrupted oil supplies and Ukraine's systematic attacks ‌on Russian refineries stymied production.

Elevated diesel prices, a key driver of transportation and freight costs, have boosted overall inflation, causing pain for consumers, farmers and businesses. High fuel costs were a major factor helping Democrats sweep both houses of ‌Congress from President Donald Trump's Republicans in this month's midterm elections. The national average retail diesel price was $5.998 on Saturday, ‌according to fuel price tracker GasBuddy. It had risen to $5.820 a gallon on September 3, breaking the record set after Russia's full-scale invasion of Ukraine in 2022. Diesel topped $6 a gallon on September 10 and hit a record $6.519 on September 22.

In California, where refining ⁠capacity is ​constrained and fuel specifications are ⁠more stringent than elsewhere in the country, diesel prices briefly exceeded $10 a gallon. The Trump administration has introduced several measures aimed at easing ⁠costs, including temporarily lifting federal taxes on red-dyed diesel,easing sanctions on Russian fuel and launching an $8 billion support program to help ​farmers offset higher fuel costs during the autumn harvest. Those measures, however, provided only limited relief as supply ⁠concerns caused by the ongoing Iran war continued to dominate the market.

Seasonal factors and a drop in crude oil prices, to ⁠which diesel ​prices are closely linked, are now helping bring prices down. Brent crude futures are down 18.5% over the past two weeks. Demand typically softens in the autumn as people drive less, hurricane season winds down and the risk ⁠of Gulf Coast refinery disruptions declines, said Patrick De Haan, GasBuddy's head of petroleum analysis. Refinery maintenance is also ⁠largely completed by November, allowing ⁠production rates to recover, he said.

These factors have also contributed to gasoline falling below $4 per gallon this month for the first time since August 10, according to GasBuddy ‌data.