Diesel prices down for second straight week
August 24, 2010
Diesel prices are continuing to fluctuate to a wide degree, according to data released yesterday by the Department of Energy’s Energy Information Administration (EIA).
For the week of August 23, the EIA said average diesel prices at $2.957 are down 2.2 cents compared to the week of August 16. This marks the second straight week diesel prices have declined since reaching $2.991 the week of August 9.
Even with the sequential decline, diesel prices are 28.9 cents higher compared to the same timeframe a year ago and have been below the $3 per gallon mark for the past 13 weeks. And the current average of $2.957 per gallon is 17 cents below the 2010 high water mark of $3.127 for the year, which occurred during the week of May 10.
These current prices still match up with the EIA’s most recent Short Term Energy Outlook, which is calling for 2010 average diesel prices to be $2.97 per gallon and $3.14 in 2011.
As for oil prices, 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 $72.42 (as of press time) and have been falling for five straight days, due to higher inventories which is a sign of weaker demand and slowing economic growth, according to a Bloomberg report.
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.
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