Diesel prices fall for the third time in last four weeks

Diesel prices dipped for the third time in the last four weeks, according to data from the Department of Energy’s Energy Information Administration (EIA).

The price per gallon of diesel dipped 4.2 cents to $4.085 per gallon. This is the steepest weekly drop since prices fell 6.6 cents the week of December 19 from $3.894 to $3.828 per gallon.

Despite this drop in prices, diesel remains above the $4 per gallon mark for the ninth straight week. While these prices remain fairly high, they are still more than 50 cents less per gallon compared to the summer of 2008, which peaked during the week of July 14, 2008 at $4.764 per gallon.

Diesel prices have seen gains in 13 of the last 16 weeks and have risen a cumulative 30.2 cents since the week of January 2.

The gap in annual price per gallon comparisons continues to narrow, with this week’s price up 1.3 cents compared to last year. This is down sharply from comparisons in the mid-80s range just a few months ago.

And while prices have largely been trending down prior to this recent increase, shippers have maintained that they are forecasting for steady fuel increases in their supply chain and transportation budgets should diesel prices continue to hover near or at the $4 per gallon mark.

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 earlier this 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.”

Oil barrel prices on the New York Mercantile Exchange as of press time were at $103.21 per barrel.