Diesel prices head up 3 cents, according to EIA
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The average price per gallon of diesel gasoline jumped 3 cents to $3.903 per gallon, according to the Department of Energy’s Energy Information Administration (EIA).
This marks the second straight weekly increase, following a 0.02 gain to $3.873 per gallon the week of December 23. According to EIA data, these gains were preceded by two weeks of declines for a cumulative 1.2 cent drop during the weeks of December 9 and December 17, and prior to that saw a two-week stretch in which prices headed up a cumulative 6.1 cents. On an annual basis, the average price per diesel is down 1.5 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 $3.92 per gallon, below 2012’s $3.97. For 2014, it expects the average price to be 3.77 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 $97.70 on the New York Mercantile Exchange at press time.
Other factors include lukewarm consumer sentiment and strong momentum in domestic natural gas production, too. The Associated Press reported that the current price is due in part to reduced trading volumes and the impact of a strengthening dollar.
And the International Energy Agency recently stated in a report 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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