The diesel futures market that has been among the strongest leaders in the petroleum complex of late was shedding strength Friday, with contracts trading near lows for the day.

There was some suspicion that the widening July/August spread was a sign that there was a squeeze on July shorts, but the spread is coming in and July diesel was down some 5cts heading into midday. There is also very little volume transacting in the July products and August Brent contracts.

Crude oil had been holding gains, but recent market talk that OPEC and its allies are weighing another "super-sized" increase has sent West Texas Intermediate lower after topping out at more than $66/bbl. There was an initial drop, but near midday oil prices were trending back toward unchanged.

July diesel was down, but the contract was still several cents higher than the lows from earlier in the week. The contract most recently traded at $2.2857/gal, down 7.44cts. The more active August contract was down nearly 5.46cts at $2.2358/gal. Based on open interest changes on Thursday, there was likely some position rolling into the August contract as well.

Volumes have dissipated in crude oil as WTI saw less then 670,000 contracts traded, the lightest trade day since late March and a sign of either fatigue from wide price swings or a bit of a comfort level for positioning and pricing.

After rallying to $66.09, August WTI was up just a couple of cents at $65.32/bbl. August Brent expires on Monday and was down a few cents at $67.66/bbl, while September was down 11cts at $66.58/bbl.

The RBOB contract dropped as low as $2.059/gal when the selloff was taking place around 11:30 a.m. ET. The contract remains down for July and August but has started to rebound from the lows, with July most recently trading at $2.0706/gal, down 2.84cts, and the August contract off by 2.32cts at $2.0545/gal.

Dipping RBOB futures have put pressure on cash markets, but the Gulf Coast market with a slightly wider discount is pricing below $1.90/gal heading into midday.

This content was created by Oil Price Information Service, which is operated by Dow Jones & Co. OPIS is run independently from Dow Jones Newswires and The Wall Street Journal.

--Reporting by Denton Cinquegrana, dcinquegrana@opisnet.com; Editing by Michael Kelly, mkelly@opisnet.com

(END) Dow Jones Newswires

June 27, 2025 12:32 ET (16:32 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.