Diesel turns up again as Brent touches $110, ending a 17-day slide in AAA's average

Retail diesel stopped falling last week, and the crude market is giving carriers little reason to expect a quick return to the downtrend.

The AAA national average for diesel was $6.3187 a gallon on Oct. 19, according to AAA's price page. That is below AAA's record of $6.5276, set Sept. 22, but above the $6.2785 low it reached on Oct. 9, a figure reported by FreightWaves on Oct. 14. AAA's average had fallen for 17 straight days before that turn.

What changed

Crude jumped on Friday. Discovery Alert reported on Oct. 17 that Brent settled at $109.86 a barrel on Oct. 16, up 3.7% on the day and its first touch of $110 since May 19. It cited U.S. Central Command saying an Iranian Revolutionary Guard projectile hit the container ship GFS Pride in the Strait of Hormuz, and that the ship sank under tow with all 21 crew evacuated.

The same report cited Goldman Sachs, which puts its base case for Brent near $80 in the fourth quarter but above $120 if Hormuz attacks continue. It also cited S&P Global putting the diesel premium over crude at about $38 a barrel.

The government's weekly number still looks backward. The U.S. Energy Information Administration put the on-highway average at $6.179 for the week of Oct. 12, down 2 cents from the prior week and up $2.514 from a year earlier. EIA's next release is due Oct. 20, and it will show how much of last week's wholesale move has reached the pump.

What it means for carriers

Fuel is already a large share of the per-mile bill. Heavy Duty Trucking reported on Oct. 14 that DAT's fuel component hit records in September at 84 cents a mile for van, 92 cents for reefer and $1.01 for flatbed. DAT's Dean Croke told the publication that freight rates typically take three to four weeks to catch up with rising diesel.

That lag matters for anyone running on spot freight or on a fuel surcharge tied to a weekly index. Check which index your surcharge schedule uses and when it resets, because an EIA-based schedule will still reflect the lower early-October prices for a few more days.

What shippers and brokers should watch

Fuel surcharge tables that reference EIA will move later than pump prices do. If crude holds near $110, expect carriers to ask about interim adjustments, and expect the dyed-diesel relief announced Oct. 5 to do little for most fleets. The American Trucking Associations told carriers to wait for Treasury guidance before running dyed fuel on the road, per Heavy Duty Trucking.

Track the daily AAA reading against the weekly EIA print. When the two diverge for more than a few days, the weekly number usually catches up.

You can follow the national average on PDI's diesel prices page at /diesel.