Diesel prices rise 0.5 cents to a new 2016 high

The average price per gallon of diesel gasoline saw an increase for the 11th time in the last 12 weeks, according to data released by the Department of Energy’s Energy Information Administration (EIA).

The average price saw a slight gain of $0.5 to $2.271 per gallon, which is now the highest level of 2016 to date, topping last week’s average of $2.266. The previous high prior to last week was the week of December 28, when it was at $2.237 per gallon.

Since diesel eclipsed the $2 per gallon mark, hitting $2.021 during the week of March 7, it has gone up a cumulative 25 cents since then. 

On an annual basis, the average price per gallon is down 60.7 cents.

Prior to increases in 11 of the last 12 weeks, diesel was down for several weeks.

Shippers said that the decreases in diesel costs over the last several months is beneficial from a financial perspective, and after several years of high fuel costs, many shippers began tracking diesel much more closely.

In the past, diesel had cost more than gasoline because U.S. refineries export much of their diesel output. That leaves less available for the domestic market, and federal taxes are higher for diesel than for gasoline. But as gasoline demand has risen around the world, refineries are running full out worldwide to meet that demand, resulting in a relative glut of diesel fuel, experts say.

At the recent NASSTRAC conference, American Trucking Associations chief economist Bob Costello said that what industry stakeholders should look at when viewing fuel prices is the directional forecast, rather than a specific price forecast.

“If crude oil prices get to $50 or $60 per barrel, what are the fracking companies going to do? They are going to start producing again,” he said. “I do think there is a new ceiling on fuel prices that was not there before, with the caveat there being that there can be [unpredicted] things that could happen in many parts of the world that produce oil, which can have a big impact.”

West Texas Intermediate Crude Oil dropped more than 2.5 percent to $43.50 on the New York Mercantile Exchange.