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
Reduce Order Processing Costs by 80%
Sales order automation software will seamlessly transform inbound emailed and printed purchase orders into electronic sales orders that can be automatically processed into your ERP system with 100% accuracy.
Download Today!
From the June 2016 Issue
In the wildly unstable ocean cargo carrier arena, three major consortia are fighting for market share, with some players simply hanging on for survival. Meanwhile, shippers may expect deployment shifts as a consequence of the Panama Canal expansion.
WMS Update: What do we need to run a WMS?
Supply Chain Software Convergence: Synchronization Realized
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Optimizing Global Transportation: How NVOCCs Can Use Technology to Operate More Profitably
Global transportation isn't getting any easier to manage, especially for non-vessel operating common carriers (NVOCCs). Faced with uncertainties like surcharges—but needing to remain competitive when bidding against other providers—NVOCCs need the right mix of historical data, data intelligence, and technology support to make quick and effective decisions. During this webcast you'll learn how Bolloré Transport & Logistics was able to streamline its global logistics and automate contract management.
Register Today!
EDITORS' PICKS
Top 50 U.S. and Global 3PLs 2016: Technology Now the Key Differentiator
Following last year’s merger and acquisition frenzy, the speed of technology implementation by the...
Digital Reality Check
Just how close are we to the ideal digital supply network? Not as close as we might like to think....

Top 25 ports: West Coast continues to dominate
The Panama Canal expansion is set for late June and may soon be attracting more inbound vessel calls...
Port of Oakland launches smart phone apps for harbor truckers
Innovation uses Bluetooth, GPS to measure how long drivers wait for cargo