Diesel prices are up for second straight week

Diesel prices inched up for the second straight week on the heels of four straight weekly declines, according to data released this week by the Department of Energy’s Energy Information Administration (EIA).

Average diesel prices for the week of September 20 at $2.960 per gallon were up 1.7 cents from the week of September 13. Prior to this increase, diesel prices have been heading down since reaching $2.991 the week of August 9, falling a cumulative six cents from August 9 to September 6, according to EIA data.

The current average price per gallon of diesel is 33.8 cents higher than a year ago, and prices have now been below the $3 per gallon mark for the last 17 weeks. The current average price per gallon of diesel is 16.7 cents below the 2010 weekly high of $3.127 per gallon from the week of May 10.

The EIA is calling for 2010 crude oil prices to hit $79.13 per barrel and 2011 prices at $83.50 per barrel. This is below current oil prices, which are at $74.17 (as of press time), which is nearly even with last week. 

Various report have indicated current oil prices have been relatively low due to higher inventories which is a sign of weaker demand and slowing economic growth. Another reason for declining prices is that summer driving season is over, which means fewer people are driving.

And an Associated Press report noted that oil prices have hovered around the $75 a barrel level since the beginning of summer, with some analysts expecting high crude inventories to weigh on prices even if the economy grows more than expected over the next year.

As LM has reported, even though diesel prices appear to be in check for the time being, freight transportation stakeholders maintain that there is no real rhyme or reason when it comes to assessing the string of rising and falling fuel prices.

Some experts say that the there has never been a period of volatility in fuel prices like there has been in the last year. And with prices currently down by no means indicates prices will stay down or sharply go up.

As oil prices ride the wave of fluctuating prices, a recent Logistics Management reader survey of about 150 logistics, supply chain, and transportation managers found interesting disparities regarding how much shippers’ average fuel surcharges were above their base rates.

The survey revealed that 20 percent felt average fuel surcharges were 6-10 percent above base rates as did another 20 percent say average fuel surcharges were 11-15 percent above base rates. 19 percent said average fuel surcharges were in the 0-5 percent range above base rates, with 17 percent of respondents at 16-20 percent and 9 percent saying average fuel surcharges were 21 percent above base rates.