Diesel prices move up 3.9 cents to $3.573 per gallon, says EIA
February 23, 2011
Diesel prices continued to surge, with the price per gallon up 3.9 cents this week to $3.573, according to the Department of Energy’s Energy Information Administration (EIA). On an annual basis, diesel prices are up 74.1 cents.
Diesel prices have gone up for 12 straight weeks for a cumulative 41.1 cent gain, coupled with prices being above $3.40 per gallon for the sixth straight week. Current prices are at their highest level since reaching $3.659 the week of October 13, 2008.
This week’s price also represents the 21st consecutive week prices have been at $3 per gallon or more. 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.
Oil barrel prices are currently trading at $100.01 on the New York Mercantile Exchange as of press time and could potentially go higher due to violence continued to rage in Libya, which has led to several oil companies suspending or shuttering their operations in the oil-rich North African country, according to a Wall Street Journal report.
Some experts maintain that the price per gallon of diesel and regular gasoline could approach the $4 per gallon level, due to things like higher global demand for oil and a cold winter in many parts of the United States and Europe, leading to higher oil prices.
And as LM has reported, this could to a scenario where shippers need to be prepared to plan for higher energy prices, especially when taking into consideration the relatively low fuel prices they factored into transportation budgets for much of 2010.
The EIA is calling for 2011 crude oil prices to hit $93.26 per barrel, according to its recently-revised short-term energy outlook. This is above a previous estimate of $85.17 per barrel for 2011. On the diesel side, the EIA is calling for the price per gallon of diesel in 2011 to average $3.43, up from a previous estimate of $3.40.
A research report from Avondale Partners analyst Donald Broughton noted that the large spike in crude oil prices caused by increasing geopolitical risk in the Middle East will provide further fuel for the continuing rise in diesel prices.
Michael A. Regan, CEO & Chairman of the Board, TranzAct Technologies, wrote in a recent blog entry for LM that these ongoing diesel increases could have a hazardous effect on shippers’ freight budgets.
Regan explained that “shippers could be paying as much as 15% to 20% more for freight than they did in 2010 (depending on their fuel surcharge calculation).”
For more articles on diesel prices, please click here.
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