Diesel prices fall 2.9 cents to $3.833 per gallon
September 20, 2011
Diesel prices fell for the second straight week, falling 2.9 cents to $3.833 per gallon, according to the Department of Energy’s Energy Information Administration.
This follows a 0.6 cent decline last week, which was preceded by a 5.8 cent gain over the previous two weeks. Prior to that, prices were down for four straight weeks, falling 2.5 cents, 6.2 cents, 4 cents, and 1.2 cents per gallon, respectively, over that period. Before that month of declining prices, diesel saw a cumulative 9.9 cent gain over a three week period.
The price per gallon is now 29.1 cents below the 2011 high of $4.124 per gallon the week of May 2, which marks the highest level for diesel prices since August 2008, when prices were approaching $5 per gallon. The price per gallon for diesel fuel has not exceeded the $4 mark since the week of May 16, when it hit $4.061.
Diesel is now 87.8 cents higher than it was a year ago at this time, down from 91.9 cents last week. In its recently-revised short-term energy outlook, the EIA is calling for diesel prices to average $3.85 per gallon in 2011 and $3.87 in 2012, with oil pegged at $94.40 per barrel in 2011 and $94.50 in 2012, down from a recent estimate of $101.00.
Oil is currently trading at $85.30 on the New York Mercantile Exchange. An Associated Press report noted that oil has been falling on mounting concerns about Europe’s credit problems.
With oil prices remaining in the $80-to-$90 per barrel range, prices are still well above last year’s average of $79.64 per barrel, which means gasoline pump prices should remain higher than last year’s levels, according to various reports.
While diesel prices have been below the $4 per gallon mark, shippers and carriers have told LM the still relatively high prices remain a concern. While many have indicated that prices at current levels are still digestible, they cautioned that could quickly change depending on how quickly prices rise.
And while prices are not at the levels they were three years ago, shippers continue to remain cognizant of prices, as they can rise quickly without warning, due to things like natural disasters or acts of terrorism.
In a recent interview with LM, Chuck Taylor, founder and principal of Awake! Consulting, an organization that encourages supply chain professionals to play active roles in shaping national energy policy, explained that even with prices fairly stable at the moment, the world has entered the “Danger Zone” and there is little slack in the system.
“It won’t be long before it becomes apparent that demand is permanently outstripping supply and only solution will be to use less oil whether we like it or not,” said Taylor.
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