Subscribe to our free, weekly email newsletter!


Diesel prices down for third straight week

Average weekly price is nearly 20 cents below 2010 high
By Jeff Berman, Group News Editor
August 31, 2010

While it may be too early to call it a definitive trend, it is clear diesel prices of late have been taking a turn south, according to data released this week by the Department of Energy’s Energy Information Administration (EIA).

This much was evident, as average diesel prices for the week of August 30 at $2.938 per gallon were down 1.9 cents from the week of August 23. Prices have been heading down since reaching $2.991 the week of August 9, according to EIA data.

While diesel prices are inching down, this current average price per gallon of diesel is 26.4 cents higher than a year ago, and prices have been below the $3 per gallon mark for the past 14 weeks. What’s more the current average price per gallon of diesel is 18.9 cents below the 2010 weekly high of $3.127 per gallon from the week of May 10.

Current diesel prices are in line with the EIA’s 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 $74.19 (as of press time). Various report have indicated oil prices have been due to higher inventories which is a sign of weaker demand and slowing economic growth. A Bloomberg report noted that oil prices have slipped six percent in the last month and have increased six percent in the last year.

Bloomberg noted that prices are likely to remain down, with oil supplies rising 1.3 million barrels—or 0.4 percent—in the seven days ended August 27 from 358.3 million barrels the previous week. This gain, according to Bloomberg, would leave oil stockpiles at its highest level since July 13.

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.

If diesel prices do remain down, it is likely to have a significant impact on both shippers and carriers. But with the amount of volatility regarding fuel prices, the direction prices eventually head in is uncertain.

A shipper recently told LM that when it becomes time to negotiate rates, carriers will be talking a lot about the cost of fuel and using it as a leverage point for general rate and line haul increases. And because of this, the shipper explained that shippers must be acutely aware of what percentage of their invoice cost is actual fuel surcharge.

About the Author

Jeff Berman headshot
Jeff Berman
Group News Editor

Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. .(JavaScript must be enabled to view this email address).


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

The Department of Transportation’s Bureau of Transportation Statistics (BTS) reported this week that U.S. trade with its North America Free Trade Agreement (NAFTA) partners Canada and Mexico increased 4.4 percent from August 2013 to August 2014 at $100.6 billion.

As expected, global trade dipped from August to September but still saw annual gains, according to data issued this week by Panjiva, an online search engine with detailed information on global suppliers and manufacturers.

Transportation and logistics merger and acquisition (M&A) activity in the third quarter saw annual gains, which were driven by smaller deals in the trucking logistics, shipping, and passenger air sectors, according to data issued in the Intersections report by PwC this week.

With the holidays rapidly approaching, it appears retailers are not quite done getting inventory set up and on the shelves in time for what is expected to be a fairly active shopping season. That much was evident based on recent data for September volumes issued by the Port of Los Angeles (POLA) and the Port of Long Beach (POLB).

Join Industry Expert Adrian Gonzalez for this educational webinar on the tenets and the benefits of Closed-Loop Operational Management. You’ll learn how Closed-Loop Operational Management optimizes orders, inventory, and transportation concurrently, and how it is able to optimize large-scale problems on a daily basis.

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA