Diesel Prices Continue on Downward Path
January 15, 2013 - SCMR Editorial
Diesel prices fell for the seventh straight week, according to the Department of Energy’s Energy Information Administration.
The average price per gallon of diesel gasoline was down 1.7 cents to $3.894 per gallon. Along with prices being down for seven straight weeks, prices have been down in 12 of the last 13 weeks.
Since reaching a more than four-year weekly high of $4.15 per gallon the week of October 15, diesel prices have gone down a cumulative 25.6 cents. What’s more, prices have been below the $4 per gallon mark for six consecutive weeks.
The average price per gallon is up 4 cents compared to a year ago at this time, down from an 8.3 cent differential last week.
In its recently updated short-term energy outlook, the EIA is calling for diesel prices to average $3.97 per gallon in 2012 and $3.84 in 2013, with WTI crude oil is expected to hit $94.26 per barrel in 2012 and $88.38 in 2013.
As previously reported, regardless of the fluctuation in diesel prices, shippers are cognizant of the impact diesel prices can have on their bottom line—for better or worse.
And they continue to be proactive on that front, too, by taking steps to reduce mileage and transit lengths when possible as well as cut down on empty miles.
And even through shippers want to adjust budgets in order to offset the increased costs higher fuel prices bring, it is not always an easy thing to manage.
The focus from a supply chain management perspective, according to shippers, is more on utilization and efficiency by doing things like driving empty miles out of transportation networks.
Shippers have told Logistics Management—SCMR’s sister publication—that adjusting budgets is only part of the solution when it comes to dealing—and living—with fuel price fluctuation.
Low diesel prices are expected to continue to be the norm for the foreseeable future.
The EIA recently said that it estimates gasoline prices are expected to drop more than 5 percent in 2013, coupled with rising less than inflation over the next decade.
The average price per barrel of oil on the New York Mercantile Exchange was at $94.15, marking the first time since September 18 that prices topped $94 per barrel. The Associated Press reported that since the Fiscal Cliff deal was reached oil has had few catalysts to move in any direction, adding that economic news has been mixed and global supplies appear to be ample, with no major disruptions to production in oil-producing nations.