Transportation news: Diesel prices remain above the $3 per gallon mark for the week of October 18
October 19, 2010
The average price per gallon of diesel gasoline remained above the $3 per gallon for the third straight week, according to data released this week by the Department of Energy’s Energy Information Administration.
For the week of October 18, the EIA reported that average diesel prices are $3.073 per gallon, a 0.7 cent increase from the week of October 11.
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. But the recent rise in prices is in line with gains in the price per barrel of crude oil, which has been slightly more than $80, on average, during the same period. Current oil prices are $81.01 per barrel, according to media reports as of press time.
The current average price per gallon of diesel is 36.8 cents higher than it was a year ago and 5.4 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.
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.
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.”
And Derek Leathers, Chief Operating Officer of Werner Enterprises, said that even with the ongoing uncertainty regarding oil and diesel prices, Werner is planning for “fairly stable” pump prices in the coming months.
“We don’t see $4.75 prices per gallon [like in 2008] returning between now and the end of the year,” said Leathers. “At the same time, though, we don’t know where prices are going to go so whatever we can do to be more efficient and burn less fuel is a better approach.”
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