Diesel prices drop for fifth week in a row, reports EIA

The average price per gallon of diesel dropped for the fifth straight week, according to data issued by the Department of Energy’s Energy Information Administration (EIA).

With a 3.1 cent decline, the average price per gallon now stands at $2.348, following declines of 2.3 cents, 1.2 cents, 0.9 cents, and 0.3 cents, respectively, over the previous four weeks.

Weekly prices have been either flat or down going back to the week of June 20, when it was at $2.426 per gallon.

Prior to that for a stretch of 20 weeks, only three weeks saw a decrease in price.

On an annual basis, this week’s price is down 32 cents compared to the same week a year ago.

When diesel was down for an extended period, shippers said that the decreases in diesel costs over that stretch was beneficial from a financial perspective, and after several years of high fuel costs, many shippers began tracking diesel much more closely.

In the past, diesel had cost more than gasoline because U.S. refineries export much of their diesel output. That leaves less available for the domestic market, and federal taxes are higher for diesel than for gasoline. But as gasoline demand has risen around the world, refineries are running full out worldwide to meet that demand, resulting in a relative glut of diesel fuel, experts say.

At the recent NASSTRAC conference, American Trucking Associations chief economist Bob Costello said that what industry stakeholders should look at when viewing fuel prices is the directional forecast, rather than a specific price forecast.

“If crude oil prices get to $50 or $60 per barrel, what are the fracking companies going to do? They are going to start producing again,” he said. “I do think there is a new ceiling on fuel prices that was not there before, with the caveat there being that there can be [unpredicted] things that could happen in many parts of the world that produce oil, which can have a big impact.”

West Texas Intermediate Crude oil is currently trading at $40.86 per barrel on the New York Mercantile.