Diesel street margin fell to $1.104 a gallon as the pump neared its monthly high

The retail diesel margin is $1.104 a gallon today, and it has not been that tight at any other point in the month. Over the same stretch the pump price climbed to $5.599, sitting at the 98 percent mark of its 30-day range.

The reason is in the two moves. Retail diesel is up 4.7 percent over 30 days. ULSD futures, the wholesale side, are up 19.6 percent and now trade at $4.54, at the 91 percent mark of their own range. Wholesale rose more than four times as fast as retail could pass along, and the gap came out of the marketer's pocket. Anyone buying at the rack and selling at the pump has watched real cents leave the spread even as the sign out front went up.

The refining side tells the opposite story. The 3:2:1 crack spread is 62.09, wider by 4.68 over the month, so the barrel-to-product margin that refiners work is improving while the retail margin shrinks. Crude sits in the middle of its range, WTI at $91.48 and Brent at $96.28, both up about 21 percent on the month and neither near a range extreme.

Watch whether retail catches up to the rack. Wholesale has done most of the moving, and if it holds here the pump could keep grinding higher to rebuild the spread, which may put $5.65 and change in front of drivers before the margin looks normal again. If wholesale eases first, the squeeze on marketers could lift without another move at the pump.