Diesel prices jump up a dime, says EIA
November 16, 2011
In April and May there were multiple weeks in which the price per gallon of diesel were north of $4, before settling into the $3.70 to $3.90 range for most of the subsequent weeks based on data from the Department of Energy’s Energy Information Administration (EIA). But with this weeks’ 10 cent jump to $3.987 per gallon, the days of $4 gallons may again be here.
This is the fourth week in the last five diesel prices have gone up. Last week dipped $0.5 cents to $3.887, and prices were up 6.7 cents, 2.4 cents, and 8 cents, respectively, the previous three weeks for a 17.1 cent cumulative gain. Prior to these increases, prices were down a cumulative 14.7 cents for the preceding five weeks.
At $3.987 per gallon, diesel is 13.7 cents less than the high of $4.124 per gallon the week of May 2, which marks the highest level for diesel prices since August 2008, when prices were approaching $5 per gallon. The price per gallon for diesel fuel has not exceeded the $4 mark since the week of May 16, when it hit $4.061. And this ten-cent jump is the single largest weekly gain since the week of April 11, when the price per gallon increased 10.2 cents to $4.105.
On an annual basis, the price per gallon is up 80.3 cents and is slightly down from declines in the mid-80s and higher for most of 2011 prior to recent weeks.
The price per barrel for oil is currently trading at $99.37 on the New York Mercantile Exchange, which is its highest level since July 26, according to an Associated Press report. The AP said that prices increased due to the recent report from the Department of Commerce that October retail sales were up for the fifth straight month.
“If people are opening their pocket books again, it’s good for the economy. Maybe you’ll see gasoline demand go up,” said Phil Flynn, an oil analyst at PFGBest, said in the AP report.
Prior to this oil spike, oil prices have primarily been in the $80-to-$90 per barrel range, with prices still well above last year’s average of $79.64 per barrel, which means gasoline pump prices should remain higher than last year’s levels, according to various sources.
Mike Regan, president of TranzAct Technologies and contributing blogger for LM, said that everyone assumes what is driving oil prices is supply and demand. But he said one cannot look at oil prices without considering what is happening in global currency markets.
“There are ancillary factors at work affecting the price of oil,” said Regan. “That is a factor that can be very difficult to gauge. It is a level of volatility we are still not used to seeing. The volatility of the U.S. dollar, which is a variable we had not had to factor [into energy prices as much] is a reality we are forced to live with.”
And at this week’s TransComp exhibition in Atlanta, many shippers told LM they are forecasting for steady fuel increases in their supply chain and transportation budgets should prices continue to rise at a steady rate.
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