Diesel average heads down for 13th consecutive week, reports EIA

The national average price per gallon of diesel gasoline headed down for the 13th consecutive week, according to data issued this week by the Department of Energy’s Energy Information Administration (EIA).

With a 3.8-cent decline, this week’s national average—at $2.548—follows a 7.3-cent decline, to $2.586, the week of March 30 and an 8.1-cent decline, to $2.659, for the week of March 23.

Going back to the week of January 13, when the national diesel average was $3.064, diesel prices have fallen a cumulative 51.6 cents through April 6. What’s more, the national weekly average has been below the $3 per gallon mark since the week of February 3, when it was fell to $2.956, following  $3.01 average for the week of January 27.

On an annual basis, this week’s average is down 54.5 cents compared to the same week last year, topping annual spreads of 49.2 cents, 42.1 cents, 33.7 cents, and 26.5 cents, respectively, over the previous four weeks.

Recent reports have noted that gasoline could fall below $2 a gallon in the coming weeks, driven by oil prices that are plunging after major producers failed to agree to a plan to prop up crude prices this past weekend and by fears of declining energy demand due to economic disruption from the coronavirus. 

On a Webcast recently hosted by San Francisco-based freight forwarding and customs brokerage services provider Flexport, Phil Levy, Flexport chief economist, explained that when the Coronavirus started to spread in China and Chinese factories started shutting down, a subsequent effect was the very sharp drop in energy prices, with oil prices dropping dramatically.

“That prompted OPEC to call for production restraint, and Russia refused to go along with that OPEC call, and, in response….there are now extraordinarily low energy prices,” said Levy.

West Texas Intermediate crude oil is currently trading at $26.54 per barrel on the New York Mercantile Exchange, up from $20.63 one week ago.