Diesel prices hold steady at $3.067 per gallon

The average price per gallon of diesel gasoline remained above the $3 per gallon for the fifth straight week, according to data released this week by the Department of Energy’s Energy Information Administration.

For the week of November 1, the EIA reported that that the average price per gallon of diesel fuel is $3.067 per gallon, matching the week of October 25.

Prior to the week of October 4, when diesel prices hit $3.00 per gallon, the price per gallon of diesel was below the $3.00 mark for 18 straight weeks. But the recent rise in prices is in line with gains in the price per barrel of crude oil, which has been slightly more than $80, on average, during the same period.

Current oil prices are $83.31 per barrel, according to media reports as of press time. A Reuters report stated that oil prices are up this week “ahead of an expected decision by the Federal Reserve to pump more money into the U.S. economy and after an apparent upward shift in price tolerance among oil producing countries.”

The current average price per gallon of diesel is 25.9 cents higher than it was a year ago and 6 cents below the 2010 weekly high of $3.127 per gallon from the week of May 10.
The EIA is calling for 2010 crude oil prices to hit $77.97 per barrel and 2011 prices at $83.00 per barrel, according to its recently-revised short-term energy outlook. Both figures are below recent estimates of $79.13 for 2010 and $83.50 for 2011.

If prices continue to rise at current levels, some industry experts contend that barrel prices will be between $80 and $90 in 2011 and the price per gallon of diesel will stay above $3 per gallon.

Prior to this recent uptick, oil and gasoline prices were relatively low due to higher inventories signaling weaker demand and sluggish economic growth. And a recent Associated Press report stated that while the price per barrel had been in the $75 per barrel range since early summer, some analysts expect high crude prices to weigh on prices even if the economy expands more than expected over the next year. 

While diesel prices are manageable for now, shippers need to continually monitor and adjust transportation spend levels for any situations which could result in an unexpected uptick in prices.

This was the case when diesel hit $4.75 per gallon in 2008. What’s more, with limited insight into where prices are heading shippers and carriers need to be cognizant about being more efficient overall in freight transportation operations and taking measured steps to burn less fuel.