Diesel prices fall for 13th consecutive week, reports EIA

Diesel prices dropped for the 13th straight week, according to data issued by the Department of Energy’s Energy Information Administration (EIA).

With a 2.3 cent decline to $2.008 per gallon, this week’s price stands as the lowest national average going back to the week of March 16, 2009, when it checked in at $2.017. The previous lowest comparison week prior to this week’s decline was the week of March 23, 2009, when it was at $2.09.

During this 13-week stretch of declines, diesel prices have fallen a cumulative 48.4 cents. And on an annual basis, the current price per gallon is down 82.7 cents.

Because of the volatile nature of fuel prices, shippers are accustomed to tough negotiations with carriers on fuel surcharges. Now that diesel prices have fallen, shippers say more will be expected of them to keep those savings for their companies.

Shippers say that the current ongoing decrease in diesel costs is 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.
 
Oil analysts explain that the drop in diesel would indicate a worldwide glut in crude oil is becoming a glut in refined products as well. This could keep diesel prices at these depressed levels well into 2016, they say.

Oil is currently trading at $32.62 on the New York Mercantile Exchange.

A Reuters report said that prices continue to be dragged lower by a broad decline across major financial markets and by a growing expectation that global demand will not grow quickly enough to erase the overhang of unwanted crude any time soon. And it added that the world will store unwanted oil for most of 2016 as declines in U.S. output take time and OPEC is unlikely to cut a deal with other producers to reduce ballooning output, according to the International Energy Agency.