U.S. Rack ULSD Rises 18.9cts; Gasoline Up 5.19cts

DAVENPORT, FL (DTN) – Wholesale rack prices for ultra-low sulfur diesel (ULSD) and gasoline moved higher Wednesday (4/8), extending Tuesday’s advance, even as futures markets turned sharply lower following a ceasefire in the Iran war.

U.S.-Israeli airstrikes on Iran and Tehran’s counterfire at oil and gas facilities of its neighbors will pause for two weeks to allow negotiators to find ways to end the conflict, which began on February 27, officials in the Trump administration announced. The Strait of Hormuz, where the movement of some 20 million bpd of petroleum liquids had been blockaded by Iran, will also be open during the ceasefire, the officials added.

Nationwide ULSD rack prices averaged $4.7003 gallon, up 18.87cts from Tuesday’s $4.5116 gallon, according to DTN data. Conventional unleaded gasoline rack prices averaged $3.4884 gallon, up 5.19cts from $3.4365 gallon. Premium gasoline averaged $3.7844 gallon, up 4.58cts on the session.

Futures prices moved sharply lower Wednesday morning. Front-month May NYMEX ULSD futures fell 72.24cts to $3.7550 gallon, while May RBOB gasoline futures declined 37.01cts to $2.9351 gallon. WTI crude for May delivery dropped $19.82 to $93.13 bbl.

The selloff in futures followed confirmation of a two-week ceasefire agreement between the United States and Iran, aimed at allowing negotiations to reopen the Strait of Hormuz and ease disruptions across global energy flows. The development marked a significant shift from prior escalation, sharply reducing immediate supply risk priced into the market.

Despite the steep decline in futures, rack prices continued to move higher across most regions, reflecting a lag in physical markets and ongoing tightness in near-term supply conditions.

ULSD racks increased across all regions Wednesday, with the largest moves in PADD 4 and PADD 2. Rocky Mountain ULSD rose 31.89cts to $4.4824 gallon, while Midwest prices climbed 24.99cts to $4.4819 gallon. East Coast values increased 11.32cts to $4.7243 gallon, while Gulf Coast prices rose 12.06cts to $4.6550 gallon. West Coast ULSD advanced 18.86cts to $5.7736 gallon, maintaining the strongest regional premium.

Relative to the national ULSD rack average of $4.7003 gallon, PADD 5 held the widest premium at $1.0733 above the U.S. benchmark, followed by PADD 1 at 2.40cts above. PADD 3 traded slightly below the national average, while PADD 2 and PADD 4 remained at discounts of 21.84cts and 21.79cts, respectively.

On conventional unleaded gasoline racks, movements were mixed across regions Wednesday. Rocky Mountain gasoline recorded the largest increase, rising 10.77cts to $3.2906 gallon. West Coast prices edged slightly higher by 0.18cts to $4.0436 gallon. In contrast, East Coast gasoline declined 2.34cts to $3.1625 gallon, Gulf Coast prices fell 1.04cts to $3.1753 gallon, and Midwest values slipped 0.38cts to $2.8916 gallon.

Compared with the national gasoline average of $3.4884 gallon, PADD 5 remained the only region trading at a premium, at 55.52cts above the benchmark. All other regions held discounts, led by PADD 2 at 59.68cts below the national average, followed by PADD 1 at 32.59cts, PADD 3 at 31.31cts, and PADD 4 at 19.78cts.

Premium gasoline rack prices were mixed. PADD 4 posted a sharp increase of 30.57cts to $3.7231 gallon, while Midwest prices rose 5.34cts to $3.4548 gallon. East Coast and Gulf Coast values edged slightly lower, while West Coast premiums remained elevated at $4.4429 gallon.

The divergence between sharply lower futures and higher rack prices highlights how physical markets continue to reflect tight near-term supply conditions, even as geopolitical risk premium is rapidly unwound in paper markets. While structure has eased, both ULSD and RBOB futures remain in backwardation, with front-month contracts still trading at premiums of around 25cts and 9cts, respectively, signaling that prompt supply remains tight despite the shift in broader market sentiment.