EIA reports a decline in weekly diesel prices

The Department of Energy’s Energy Information Administration (EIA) reported today that the average price per gallon of diesel gasoline  declined 0.9 cents this week to $2.414 per gallon.

This follows a .03 cent decline from the week ending June 27, when the price was $2.426 to the $2.423 per gallon reported the week of July 4.

Over the past 20 weeks, only three of those weeks have not seen a weekly increase of some sort, according to EIA data.

And on an annual basis, this week’s price is down 40 cents compared to the same week a year ago.

Prior to increases over the last several weeks, 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 $44.33 per barrel on the New York Mercantile Exchange and is at its lowest level since June 16.