Diesel falls for second time in three weeks but remains over $4 per gallon
April 17, 2012
One week after the price per gallon of diesel reached its highest mark since checking in at $4.208 per gallon the week of August 18, 2008, the price dropped for the second time in the last three weeks, according to the Department of Energy’s Energy Information Administration (EIA).
This week’s price of $4.127 per gallon is down 2.1 cents from last week. But even with the decline, the price per gallon of diesel is firmly above the $4 per gallon mark for the eighth consecutive week. While these prices remain fairly high, they are still more than 50 cents less per gallon compared to the summer of 2008, which peaked during the week of July 14, 2008 at $4.764 per gallon.
Diesel prices have seen gains in 12 of the last 15 weeks and have risen a cumulative 34.4 cents since the week of January 2. And based on EIA data this week’s 2.1 cent decline is the steepest since the week of December 26, which saw a 3.7 cent decline.
As prices continue to rise more often than not lately, the gap in annual price per gallon comparisons continues to narrow, with this week’s price up 2.2 cents compared to last year. This is down sharply from comparisons in the mid-80s range just a few months ago. And while prices have largely been trending down prior to this recent increase, shippers have maintained that they are forecasting for steady fuel increases in their supply chain and transportation budgets should diesel prices continue to hover near or at the $4 per gallon mark.
And as previously reported by LM, shippers continue to take steps to minimize the impact of fluctuating fuel costs. Over the years, they have maintained that this is imperative as higher diesel prices have the potential to hinder growth and increase operating costs, which will, in turn, force them to raise rates and offset the increased prices to consumers.
A conference call hosted by Stifel Nicolaus last week, which featured Tom O’Brien CEO, TravelCenters of America and Petro Stopping Centers and Mark Hazelwood Executive Vice President, Pilot Flying J Travel, noted that “diesel fuel price will trend higher, perhaps more quickly and with more volatility than oil prices, as diesel is in great demand around the world,” adding that [t]he demand for highway diesel fuel in the U.S. has dropped by 25%+ since 2007 due to a variety of factors.”
The price per barrel for oil is currently at $101.78 on the New York Mercantile Exchange. An Associated Press report noted that weak U.S. jobs figures and expectations of growing crude oil stockpiles raised the prospect that U.S. demand will remain tepid.
Oil barrel prices as of press time today hit $103.76 per barrel, rising slightly. An Associated Press report noted that this increase was due to a successful Spanish debt sale which eased fears over Europe’s debt crisis and saw investors look to U.S. earnings for signs of health in consumer spending.
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