Diesel prices fall 5.3 cents to $4.004 per gallon

The price per gallon of diesel fuel dropped at its steepest level in nearly five months, according to data from the Department of Energy’s Energy Information Administration.

By ·

The price per gallon of diesel fuel dropped at its steepest level in nearly five months, according to data from the Department of Energy’s Energy Information Administration (EIA).

Declining 5.3 cents to $4.004 per gallon, this falls short of a 6.6 cent decrease to $3.828 per gallon during the week of December 19.

Diesel prices have been falling for five consecutive weeks, during which time prices have dropped a cumulative 14.4 cents. But even with these declines, prices have been above the $4 per gallon mark for 12 straight weeks, since hitting $4.051 per gallon the week of February 27.

On an annual basis, diesel is 5.7 cents less than it was a year ago.

Even with recent declines, shippers continue to keep a watchful eye on fuel prices and are taking steps to reduce mileage and cut down on empty miles. Steps like this were cited by many shippers at the NASSTRAC Logistics Conference & Expo earlier this month.

And as previously reported by LM, shippers continue to take steps to minimize the impact of fluctuating fuel costs. Over the years, they have maintained that this is imperative as higher diesel prices have the potential to hinder growth and increase operating costs, which will, in turn, force them to raise rates and offset the increased prices to consumers.

A conference call hosted by Stifel Nicolaus last month, which featured Tom O’Brien CEO, TravelCenters of America and Petro Stopping Centers and Mark Hazelwood Executive Vice President, Pilot Flying J Travel, noted that “diesel fuel price will trend higher, perhaps more quickly and with more volatility than oil prices, as diesel is in great demand around the world,” adding that [t]he demand for highway diesel fuel in the U.S. has dropped by 25%+ since 2007 due to a variety of factors.”

With the decline in diesel prices comes a decline in the price per barrel of oil, which was at $94.75 per barrel at press time. This marks the lowest level since dropping to $93.65 on December 19, 2011, according to an Associated Press report. The report added that the low price was due in large part to Eurozone fears arising from the political stalemate in Greece and banking woes in Italy and Spain.

Despite the fluctuation of oil prices, which only weeks ago were north of $107 per barrel, LM Oil and Fuel Columnist and Senior Analyst at Mercator International, LLC Derik Andreoli recently wrote that gasoline prices remained insulated from the rising cost of crude for a couple reasons.

“On the supply side, ethanol production increased rapidly over this period of time. Today, roughly one in ten gallons of gasoline consumed in the U.S. is derived from corn-based ethanol, which is a substitute for gasoline but not diesel,” wrote Andreoli. “Moreover, European gasoline demand has been supplanted by diesel, and old, inflexible European refineries were set up to maximize gasoline output. As a consequence, Europe’s surplus gasoline was, and is, exported to the U.S. East Coast. As gasoline supply climbed relative to diesel, U.S. gasoline consumption fell as a consequence of the recession. Only now is it rebounding as the economy limps along the path of recovery. With fuel economy increasing, however, demand is not likely to recover to pre-recession levels.”


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
The View from the New “Single Window”
The single window, officially known as the "International Trade Data System," operates via the Customs and Border Protection (CBP) agency's Automated Commercial Environment (ACE) platform, and serves as a single point of contact for all trade filings.
Download Today!
From the March 2017 Issue
WMS vendors are stepping up to the plate and developing functionalities and solutions that meet the complex needs of today’s companies. Our top analysts take a peek into these developments and discuss the DC of the future and the software that will support it.
5 Supply Chain Trends Happening Now
2017 Warehouse/DC Equipment Survey: Investment up as service pressures rise
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
2017 Trucking Regulations & Infrastructure Update
In this session our panel brings shippers up to date on the state of transportation regulations. Discussion will revolve around regulatory reform, aspects of the federal highway bill and what the transportation landscape looks like in the early days of the Trump administration.
Register Today!
EDITORS' PICKS
LM Exclusive: Major Modes Join E-commerce Mix
While last mile carriers receive much of the attention, the traditional modal heavyweights are in...
ASEAN Logistics: Building Collectively
While most of the world withdraws inward, Southeast Asia is practicing effective cooperation between...

2017 Rate Outlook: Will the pieces fall into place?
Trade and transport analysts see a turnaround in last year’s negative market outlook, but as...
Logistics Management’s Top Logistics News Stories 2016
From mergers and acquisitions to regulation changes, Logistics Management has compiled the most...