Diesel prices head up for fourth straight week, reports EIA

Data issued this week by the Department of Energy’s Energy Information Administration (EIA) showed that the average price per gallon of diesel headed up 2.4 cents to $2.878 per gallon, rising for the fourth straight week.

During this stretch, the cumulative gain is 12.4 cents, even though this week’s price is down $1.07 compared to the same week a year ago.

The current price of oil trading on the New York Mercantile Exchange is at $60.26 per barrel, which is up $1.04 compared to Monday’s price. A MarketWatch report said that this current price extends a recent rally in oil prices, which has been driven by signs of slowing U.S. oil production. But the report highlighted how the run up in prices could be temporary, citing investment firm Goldman Sachs saying in the report that oil-market fundamentals, however, remain weak, estimating that the global oil market will be oversupplied by 1.9 million barrels a day in the current quarter, the largest quarterly stock build this year.

A recent Logistics Management reader survey found that nearly 75 percent of the roughly 100 surveyed respondents said they do not expect a material increase in the form of higher fuel surcharges in the coming months, with the difference split between those whom said they felt fuel surcharges would increase or that they were unsure.
But, conversely, another 55.4 percent indicated that they planned to raise or adjust their freight budgets to cover higher than budgeted fuel prices should fuel prices continue to head up going forward.

As for how much freight budgets would need to head up, the results varied with: 51 percent saying between 1-5 percent; 32.7 percent saying between 6-10 percent; 6.1 percent saying 11-15 percent; 4.1 percent saying 16-20 percent; 2 percent saying between 21-50 percent, and 4.1 percent saying 100 percent.