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KSU offers look at 2024 diesel fuel prices

by Wyoming Livestock Roundup

Kansas State University (KSU) Department of Agricultural Economics Associate Professor Gregg Ibendahl primarily works in agricultural production and finance, while utilizing Kansas Farm Management Association data to provide research and analysis on cropping systems, machinery and financial trends.

Ibendalh’s latest research, released on Feb. 2, provides an outlook for 2024 diesel fuel prices.

His research is part of a series discussing diesel costs, as diesel costs are a major expense item for every producer. So, estimating diesel prices over the next year could help with planning and fuel purchase decisions.

Ibendahl analyzes fuel environments and current factors which drive prices upward or downward throughout the year.

Current prices

According to Ibendalh’s report, “Diesel prices declined during the first half of 2023, then starting rising until October and finally declined again.”

This resulted in lower diesel prices heading into 2024, while gasoline prices remained unchanged from last year. 

Of particular interest to producers, the diesel premium widened during the last half of 2023, although it still is less than last year at this time.

Ibendal also explains in a recent webinar hosted by KSU on Feb. 21, “Despite conflicts in Russia, Ukraine and the Middle East, diesel prices were volatile during 2023, but prices are well below what they were prior to the start of the Russia-Ukraine war two years ago when oil prices rose to about $135 per barrel.”

“Oil prices throughout 2023 remained in the $70 to $80 per barrel range but did fluctuate about 75 cents a couple of times,” he adds. “But, 2023 prices were at the top end of the five-year price range, while prices entering 2024 were 50 cents below last year.” 

He notes challenges facing 2024 might include the world supply concern and the domestic refinery capacity is still constrained. 

Current supply 

Diesel stocks remain below the typical range from the previous five years. Stocks of diesel fuel have improved slightly since 2022 but are at the very bottom range of normal supplies.

Refinery capacity in the U.S. remains below pre-COVID-19 levels and may never be at those levels again, so improving the supply of diesel is likely to be a long-term process. Entering 2024, diesel stocks are higher than they were a year ago.

“Current capacity is often utilized at nearly 95 percent, and thus, any hiccup in the refinery system can lead to price spikes,” Ibendahl says. “The price premium of diesel to gas widened during COVID-19, and the capacity constraints in U.S. refinery systems mean it could take years before the premiums disappears.”

He continues, “The diesel premium reached record levels at the end of 2022, but it did drop every week until July of 2023.”

However, in July, the price premium was actually below historic levels, and the price premium rose from July to November 2023. 

“The price premium for diesel has declined slightly, but the current premium of 65 cents is about twice the typical premium range from the previous five years,” he adds.


Ibendahl projects diesel prices for the next 12 months based on the oil futures price and the expectation of the diesel to gasoline premium, concluding diesel prices should decline for the next six months and then rise.

The futures market is indicating steady oil prices, and the diesel premium is expected to follow the trend from 2023 where the premium declined until the summer and then starting increasing again. 

“As long as oil stays in the $70 range, diesel prices should remain steady as well. However, the oil market is very volatile and this forecast could change very quickly,” he says.

Diesel prices exhibit some seasonality, peaking higher in the spring and then falling, but its seasonality is not as strong as gasoline, where gas prices rise during the summer due to increased driving. 

“However, biodiesel and renewable diesel have a strong potential for a fossil fuel replacement for diesel,” he says. “Biodiesel may be peaking, but renewable diesel looks to have a bright future.”

Melissa Anderson is the editor of the Wyoming Livestock Roundup. Send comments on this article to

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