Diesel prices are down for first time in four weeks, says EIA

After three straight weeks of increases, diesel prices dipped $0.5 cent to $3.887, according to the Department of Energy’s Energy Information Administration (EIA).

Prices were up 6.7 cents, 2.4 cents, and 8 cents, respectively, the previous three weeks for a 17.1 cent cumulative gain. Prior to these increases, prices were down a cumulative 14.7 cents for the preceding five weeks.

The current price per gallon is 23.7 cents less than the high of $4.124 per gallon the week of May 2, which marks the highest level for diesel prices since August 2008, when prices were approaching $5 per gallon. The price per gallon for diesel fuel has not exceeded the $4 mark since the week of May 16, when it hit $4.061.

And the price per gallon for diesel is now 77.1 cents above its level from a year ago and is slightly down from declines in the mid-80s and higher for most of 2011 prior to recent weeks.

Oil barrel prices are currently trading at $96.17 on the New York Mercantile Exchange.

A Reuters news story stated that a U.N. International Atomic Energy Agency report due this week is expected to show recent activity in Iran aimed at developing nuclear bombs, citing Western diplomats as the source.

“We have a temporary solution to the Greek political crisis, strong seasonal demand for heating oil, low gas oil stockpiles in Europe, low distillate stockpiles in the U.S., and China becoming a net diesel importer in November,” said Carsten Fritsch, an energy analyst at Commerzbank in Frankfurt. “There is also the geopolitical risk from the Iran nuclear program.”

Prior to this oil spike, oil prices have primarily been in the $80-to-$90 per barrel range, with prices still well above last year’s average of $79.64 per barrel, which means gasoline pump prices should remain higher than last year’s levels, according to various sources.

Mike Regan, president of TranzAct Technologies and contributing blogger for LM, said that everyone assumes what is driving oil prices is supply and demand. But he said one cannot look at oil prices without considering what is happening in global currency markets.

“There are ancillary factors at work affecting the price of oil,” said Regan. “That is a factor that can be very difficult to gauge. It is a level of volatility we are still not used to seeing. The volatility of the U.S. dollar, which is a variable we had not had to factor [into energy prices as much] is a reality we are forced to live with.”