Diesel prices fall 7.6 cents to $3.137 per gallon

As the calendar turns to January, diesel prices remain on a one-way downward path.

The Department of Energy’s Energy Information Administration (EIA) reported this week that the average price per gallon of diesel gasoline dropped 7.6 cents to $3.137 per gallon, which puts diesel at its lowest level since it checked in at $3.116 per gallon the week of November 8, 2010.

Diesel has seen one weekly price gain over the last 29 weeks, going back to June 30, when it headed up $0.01 to $3.92 per gallon, when it rose 5.4 cents from $3.623 the week of November 3 to $3.677 the week of November 10.

On an annual basis, the average price per gallon is down 77.3 cents, and prices have fallen 88.4 cents since hitting a 2014 high of 4.021 during the week of March 10.
In its recently-issued Short Term Energy Outlook, the EIA pegged the average price for diesel prices in 2014 at $3.82 and $3.07 in 2015, with crude oil at $93.82 per barrel in 2014 and $62.75 in 2015.

Oil prices have fallen 50 percent since June, and the average price per barrel on the New York Mercantile Exchange is now at $48.86.

Oil prices have tumbled since a decision made earlier in November by the Organization of Petroleum Exporting Countries to not cut production levels, even though prices have continued to decline. With that decision, production levels remain capped at 30 million barrels per day, despite decreasing global demand, which, in turn, has led to downward pricing.

The Wall Street Journal reported that top exporter Saudi Arabia was unwilling to cut production to reduce a global glut of oil, and it also noted that oil futures have plunged for months on concerns that the global market is oversupplied, largely due to unexpectedly strong U.S. output, with demand growth having also fallen short of expectations.