Transportation news: Diesel prices remain above the $3 per gallon mark
October 13, 2010
The average price per gallon of diesel gasoline remained above the $3 per gallon for the second straight week, according to data released this week by the Department of Energy’s Energy Information Administration.
For the week of October 11, the EIA reported that average diesel prices are $3.066 per gallon, representing a 6.6 cent increase from the week of October 4.
Diesel prices have been fluctuating in general lately, with this week’s 6.6 cent gain preceded by a 4.9 cent gain the prior week back to the $3 per gallon mark, representing the first time prices have hit $3 per gallon in the previous 18 weeks when diesel was at $3.024 the week of May 24.
The current average price per gallon of diesel is 46.6 cents higher than it was a year ago and 6.1 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. Current oil prices are at $81.67 per barrel as of press time.
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.
The recent upticks in prices may be related to global currency devaluations and disruptions at the largest oil port in France, where workers have been on strike for more than a week, according to a MarketWatch report.
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.
Chuck Taylor, founder and principal of Awake! Consulting, an organization that encourages supply chain professionals to play active roles in shaping national energy policy, said at the recent Council of Supply Chain Management Professionals Annual Conference that for the first time in its history the United States will be forced to increase economic growth while decreasing oil consumption, which, he said, is something that has never happened before.
“This is something that has serious implications for the prosperity of global supply chains,” said Taylor. “There are many who say that cannot be done…and that we are in for a permanent decline, but I don’t agree with that.”
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