Key facts
- Diesel prices reached a record high of over $6 per gallon in the US on Thursday.
- Bank of America stated that diesel is a key pressure point for the real economy.
- The firm highlighted diesel's impact on shipping, trucking, agriculture, construction, and mining.
- GasBuddy noted that record diesel prices will impact every cargo, shipment, and delivery.
- The average cost of diesel fuel in the US has risen about 60% since February.
Bank of America has flagged record-high diesel prices as a significant concern for the broader economy, even as market attention remains focused on rising bond yields and crude oil prices. Diesel topped $6 per gallon for the first time in the US on Thursday, a development Bank of America described as a "key real-economy pressure point."
While crude oil prices have surpassed $100 per barrel, pushing up regular gasoline costs, Bank of America believes markets are underestimating diesel's inflationary impact. The firm noted that diesel is the primary fuel for critical sectors including shipping, trucking, agriculture, construction, and mining. "Markets stop panicking when policymakers start panicking…but no panic anywhere despite the highest 30yr yield since Jun'07 and spiking commodities; oil at $100/bbl takes headlines but diesel is the key real-economy pressure point," Bank of America wrote in a note to investors on Friday. The firm warned that "Blasé markets + bravado policy = recipe for volatility."
GasBuddy, a market intelligence platform, echoed these concerns, stating that record diesel prices are too significant to ignore. Patrick De Haan, GasBuddy's head of petroleum analysis, said that these record prices will affect "every cargo, shipment, every delivery Americans are taking, and are likely to reignite inflation up and down the supply chain." GasBuddy also noted that higher diesel costs are likely to drive up prices for household goods and groceries, exacerbating existing inflationary pressures that are weighing on consumer sentiment.