Diesel futures fell to a two-week low, dropping along with crude oil on lessening concern that tensions between Russia and Ukraine will disrupt energy supply.
Prices slipped 1.3 percent. Russian President Vladimir Putin said he sees no immediate need to invade eastern Ukraine and that troops stationed in Crimea, where Russia keeps its Black Sea fleet, have only been securing their bases. Russian military exercises along Ukraine’s eastern border ended on schedule today.
“The market has come off on the fact Putin has ended his military drills,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston. “The market will calm down a bit unless we see tensions escalate in Ukraine over the next few days.”
Ultra low sulfur diesel for April delivery fell 3.98 cents to $3.0407 a gallon on the New York Mercantile Exchange, the lowest settlement since Feb. 13. Volume was 0.2 percent above the 100-day average at 3:18 p.m.
In his first public remarks since protesters overthrew Viktor Yanukovych last month, President Putin reserved the right to use force to protect ethnic Russians. The U.S. has threatened sanctions against Russia and is preparing $1 billion of aid to bolster Kiev’s interim government.
Brent oil slid 1.7 percent and gasoil 2.3 percent on ICE Futures Europe exchange. West Texas Intermediate crude fell 1.5 percent on Nymex.
Diesel’s crack spread versus WTI, a rough measure of refining profitability, narrowed 8 cents to $24.38 a barrel. The premium over European benchmark Brent crude increased 23 cents to $18.41.
Gasoline for April delivery declined 3.5 cents, or 1.2 percent, to $2.9853 a gallon on volume that was 45 percent below the 100-day average.
The motor fuel’s crack spread versus WTI widened 12 cents to $22.05 a barrel. Its premium to London-traded Brent crude rose 43 cents to $16.08.
The average U.S. pump price gained 0.1 cent to $3.46 a gallon, according to data from Heathrow, Florida-based AAA. Prices have risen 25 consecutive days to the highest level since Sept. 23. Drivers are paying 28.6 cents less than a year ago.