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Diesel Price Drop, Rising Inventories Suggest East Coast Relief Possible

• Zero Hedge

By John Kingston of FreightWaves

There have been head fakes suggesting a softening of markets in the weeks since the East Coast diesel market ran away from the rest of the country. But they proved short-lived, as the weekly national average retail diesel price published Monday by the Energy Information Administration was $5.613 a gallon. The East Coast price was 33.1 cents more than that after a three-week increase that took the spread from 4.9 cents on April 25 up to 19.2 cents the following week and 28.4 cents a week later before the latest jump.

Historically, the spread moved up and down over zero enough that it's accurate to say there's little difference between the two. The recent spread is an anomaly, albeit one that is costing drivers on the East Coast a lot of money.

But among the data in the latest weekly report of the EIA released Wednesday, there were several numbers that suggest there is reason to think the squeeze might have become less severe.

The key driver in the squeeze has been inventory levels on the East Coast. But the latest report shows inventories turning up.

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