Diesel prices head up for second consecutive week, says EIA
July 17, 2012
Diesel prices rose for the second straight week on the heels of a 12-week span of declining prices, according to the Department of Energy’s Energy Information Administration (EIA).
The average price per gallon rose 1.2 cents to $3.695, following last week’s 3.5 cent gain. Prior to last weeks increase, diesel prices had fallen a cumulative 50 cents over the previous 12 weeks, according to EIA data. This week’s price is 23 cents below the average price per gallon at this time last year.
In its recently updated short-term energy outlook, the EIA is calling for diesel prices to average $3.90 per gallon in 2012 and $3.87 in 2013 (down from previous estimates of $4.06 and $4.03, respectively), with oil expected to hit $96.80 in 2012 and $97.00 in 2013 (down from previous estimates of $104.12 and $103.75, respectively).
Oil is currently trading at $88.58 on the New York Mercantile Exchange. An Associated Press report said that the price was up slightly due to expectations that the U.S. and China
“will do more to prop up slowing economic growth” as they are the world’s biggest and second-biggest crude consumers, adding that as consumers spend more and the economy strengthens, demand for oil is likely to rise.
Even with low prices for diesel, shippers continue to keep a watchful eye on fuel prices and are taking steps to reduce mileage and cut down on empty miles. This was made clear at last month’s eyefortransport 3PL Summit in Chicago. Many shippers told LM that they are constantly monitoring fuel prices, as they relate to freight rates and the overall costs of doing business.
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.
But even with this week’s increase, shippers have gotten some pricing relief with the cost per gallon of diesel at relatively low levels still, especially when compared to a year ago.
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