Diesel prices slip below the $4 per gallon mark
November 29, 2011
As soon as the price per gallon for diesel eclipsed the $4 per gallon mark a week ago, it went back below $4, with a 4.6 cent decline to $3.964 per gallon, according to data from the Department of Energy’s Energy Information Administration (EIA).
When the price per gallon hit $4.01 last week, that was the first time it had hit that level since checking in at $4.061 on May 16. As LM has reported, 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. And prior to cracking $4 per gallon last week, the previous week saw the price per gallon spike ten cents, which was the single largest weekly gain since the week of April 11, when the price per gallon increased 10.2 cents to $4.105.
With this week’s nearly five-cent decline, diesel is now 16 cents below the 2011 high of $4.124 per gallon from the week of May 2, which is also highest level for diesel prices since August 2008, when prices were approaching $5 per gallon.
Compared to the same timeframe a year ago, the price per gallon is up 80.2 cents, which is down from declines in the mid-80s and higher for most of 2011 prior to recent weeks.
As the price of diesel hovers around the $4 per gallon mark, the price per oil is trading at $98.37 on the New York Mercantile Exchange. This is down from $102.59 earlier in the month, which marked the first time it eclipsed $100 since June.
An Associated Press report noted that benchmark oil has recovered much of the ground it hitting $102.59 a barrel, as prices rebounded Monday following strong holiday sales in the U.S, where shoppers spent nearly $1 billion more on Black Friday than they did in 2010.
“The U.S. is probably doing better than we gave it credit for,” PFGBest analyst Phil Flynn said in the AP report. “Consumers are buying more, and that’s going to get manufacturers to produce more products, and it’ll take more energy to make and distribute those goods.”
And at the TransComp exhibition in Atlanta earlier this month, 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.
“Shippers will have to pay to get their goods to market even as the price of fuel increases,” a shipper told LM. “The fuel surcharge (FSC) is not necessarily an evil thing.”
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