Diesel prices down for third straight week

Average weekly price is nearly 20 cents below 2010 high

By ·

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, 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. Contact Jeff Berman

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!

Latest Whitepaper
Making the Case for an Integrated Fleet Management Solution
Fleet management technology can drive positive supply chain and business results. Explore this special edition of Making the Case where we lay out the benefits of integrated fleet management technology in your organization.
Download Today!
From the October 2017 Logistics Management Magazine Issue
A leading distributor of professional salon products in the U.S. forms unique partnerships with its key LTLs to lower transport costs, reduce its carbon footprint and improve service to its 565 store locations.
Q4 2017 Rail/Intermodal Roundtable: Improvements apparent; work remains
LM Viewpoint: Collaboration, Now more than ever
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
The State of the Rail/Intermodal Markets
In this webinar our panel will discuss the new service challenges facing rail/intermodal providers and offer practical advice for how shippers can keep efficiency high and costs down.
Register Today!
EDITORS' PICKS
SalonCentric: One Beautiful Network
A leading distributor of professional salon products in the U.S. forms unique partnerships with its...
2017 Alliance Awards: Recognizing outstanding supply chain partnerships
In an era where effective supply chain collaboration is both highly valued and elusive, Logistics...

26th Annual Study of Logistics and Transportation Trends: Transportation at Digital Speed
While a majority of companies strongly agree that transportation is a strategically important...
34th Annual Quest for Quality Awards: Winners Revealed
Which carriers, third-party logistics providers, and North American ports have crossed the service...