Diesel prices see decent gains for second straight week

The average price per gallon of diesel gasoline saw its second straight weekly increase, the Department of Energy’s Energy Information Administration (EIA) reported this week.

With a 3.9 cent increase to $2.409 per gallon, this followed last week’s 6 cent hike to an average of $2.37 per gallon, which marked the largest weekly gain since the week of May 2, when it headed up 6.8 cents.

Prior to the last two weeks of gains, there was a stretch of seven straight weekly declines for a cumulative 11.6 cent decrease.

But in the past two weeks alone, the total increase of 9.9 cents has nearly evened that out. What’s more, the annual spreads in weekly diesel prices have significantly tightened up over the last two weeks, with the current difference between this week and the same period a year ago being down 10.5 cents and 19.1 cents last week, whereas in previous weeks they were in the 30-cent range.

U.S. West Texas Intermediate Crude Oil is currently trading at $47.37 per barrel and is up 39 cents.

A Reuters report observed that oil prices are caught between concerns about oversupply and a strong dollar on the as well as the prospect of a potential production freeze, adding that the huge global oil oversupply that has weighed on prices for the past two years may not clear until the second half of 2017.

Shippers are vigilant in keeping a watchful eye on fuel prices, due to the fact that in most modes they’re paying a fairly high percentage in terms of their average fuel surcharge above standard base rates. That was made clear in the findings of a recent Logistics Management (LM) readership study of more than 200 buyers of freight transportation and logistics services.

According to the survey, 5.5% of respondents noted that average fuel surcharges were more than 20% above base rates, with 11.4% noting that they were 16% to 20% higher. And 17.9% and 24.9% of shippers said they were in the 11% to 15% and 6% to 10% ranges, respectively, with 28.4% stating that their average fuel surcharges were 5% or less above base rates.