Diesel prices fall for first time in three weeks
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The average price per gallon of diesel gasoline dropped 0.4 cents to $3.879 per gallon, according to the Department of Energy’s Energy Information Administration (EIA).
This snapped a two-week stretch in which prices headed up a cumulative 6.1 cents. Prior to that two-week run of increases, prices were down for 11 weeks, which was comprised of nine weeks of declines and two weeks in which prices were flat. During this 11-week period, diesel prices dropped a cumulative 15.9 cents, according to EIA data.
In its recent update of the short-term energy outlook, the EIA expects the average price of diesel for 2013 to be $3.96 per gallon, just ahead of 2012’s $3.97. For 2014, it expects the average price to be 3.76 per gallon.
The general sentiment by industry observers in regards to recently declining gasoline prices is due largely to declining crude oil prices, with the average price of crude oil on the New York Mercantile Exchange at $92.75 on the New York Mercantile Exchange at press time.
Other factors include lukewarm consumer sentiment and strong momentum in domestic natural gas production, too.
And the International Energy Agency recently stated that the U.S. will pass Russia and Saudi Arabia as the world’s top oil producer by 2015, coupled with being close to energy self-sufficient in the next two decades, as well as gains from shale formation output, too, according to a Bloomberg report. The report added that crude prices will head up to $128 per barrel by 2035.
Logistics Management oil and gas columnist Derik Andreoli recently observed that on the diesel side, oil production in the U.S. and Iraq continues to grow rapidly while emerging market demand will continue its lackluster performance.
Regardless of the fluctuation in diesel prices, shippers are cognizant of the impact diesel prices can have on their bottom line—for better or worse.
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