Diesel prices head up 6 cents to a new 2016 high, says EIA

The average price per gallon of diesel gasoline saw an increase this week for the 13th time in the last 14 weeks, according to data released by the Department of Energy’s Energy Information Administration (EIA).

The current price at $2.357 per gallon saw a 6-cent increase on the way to its highest weekly price of 2016 based on EIA data. And it is also the highest price since the week of December 14, when it was at $2.338 per gallon.

Since diesel eclipsed the $2 per gallon mark, hitting $2.021 during the week of March 7, it has gone up a cumulative 33.6 cents.

Even with this stretch of gains, the average price per gallon remains lower annually, with this week’s average down 55.7 cents compared to the same week a year ago.

Prior to increases in 13 of the last 14 weeks, diesel was down for several weeks.
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.”

The Department of Energy’s Short-Term Energy Outlook recently called for 2016 diesel prices to average 2.27, with 2017 to head up to 2.64, with West Texas Intermediate Crude Oil pegged at $40.32 per barrel in 2016 and $50.65 in 2017.

West Texas Intermediate Crude Oil dropped 33 cents to $48.08 per barrel on the New York Mercantile Exchange.