Diesel prices are up 4.8 cents per gallon
September 07, 2011
Diesel prices were up for the second straight week following a month of declining prices, increasing 4.8 cents to $3.868 per gallon, according to the Department of Energy’s Energy Information Administration.
During the four week span of declines, prices dropped 2.5 cents, 6.2 cents, 4 cents, and 1.2 cents per gallon, respectively. And before that month of declining prices, diesel saw a cumulative 9.9 cent gain over a three week period. Current prices are 25.6 cents below the 2011 high of $4.124 per gallon the week of May 2.
The current price per gallon for diesel is at its fifth lowest point since the week of February 28, when it was at $3.716 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.
On a year-over-year basis, diesel prices are up 93.7 cents per gallon. And in its recently-revised short-term energy outlook, the EIA is calling for diesel prices to average $3.83 per gallon in 2011 and $3.96 in 2012, with oil pegged at $95.71 per barrel in 2011 and $101.00 in 2012.
The price per barrel for oil is currently trading at $87.80 on the New York Mercantile Exchange. A Wall Street Journal report noted that worries about the sluggish global recovery have weighed on oil futures in recent months, adding that reduced economic activity typically leads to weaker oil demand, as drivers spend less time on the road and buy fewer products made from petroleum.
With oil prices remaining in the $80-to-$90 per barrel range, prices are 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 a recent Associated Press report.
And while diesel prices have been below the $4 per gallon mark, shippers and carriers have told LM the still relatively high prices remain a concern. While many have indicated that prices at current levels are still digestible, they cautioned that could quickly change depending on how quickly prices rise.
And even with declines in prices in recent weeks, the focus from a supply chain perspective for managing fuel price ebbs and flows—for shippers—is more on utilization and efficiency by doing things like driving empty miles out of transportation networks.
According to the results of an LM reader survey conducted earlier this year, 93 percent of roughly 250 shippers said they expect to pay higher fuel surcharges in the coming months, and 70 percent said that if prices go up steadily they would raise or adjust their budget to cover higher than budgeted fuel prices.
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