National diesel average trends down but remains above $5 per gallon

Coming off of a week, which saw the highest recorded weekly average price per gallon for diesel gasoline, the national average, for the week of March 21, had to settle for being the second-highest weekly average on record, according to data issued this week by the Department of Energy’s Energy Information Administration (EIA).

Coming in at $5.134 per gallon, the national average fell $0.116 cents below the all-time high set, for the week of March 14, at $5.250 per gallon. These are the only two weeks to eclipse the $5 per gallon mark as per EIA data.

What’s more, this week’s tally marks the third straight week a new record has been set, as the average for the week of March 7 came in at $4.849, rising 0.745 over the week of February 28, the largest sequential gain on record.

Prior to the last three weeks, for the week of February 28, the national average increased $0.049, to $4.104 per gallon. That came on the heels of a $0.036-cent increase, to $4.055, for the week of February 21, and a $0.68-cent increase, to $4.019 per gallon, for the week of February 14.

Prior to these last six weeks, the national diesel average had not been above the $4 per gallon mark since the week of March 17, 2014, when it came in at $4.003 per gallon. Prior to that, the national diesel average cracked the $4 per gallon mark the week of March 25, 2013, when it came in at $4.006 per gallon.

West Texas Intermediate Crude oil is currently trading at $111.82 on the New York Mercantile Exchange, up from $94.13 a week ago at this time.

The increase on global oil prices, driven by the ongoing Russia-Ukraine conflict, has become a major concern in global energy markets while significantly increasing diesel prices for shippers and carriers.

But a MarketWatch report noted that “hopes for a diplomatic solution in Ukraine continued to weigh on oil prices Tuesday, along with COVID-19 lockdowns in China,” according to Carsten Fritsch, analyst at Commerzbank, in a note to clients.

“What is more, one province in the northeast of China has issued a ban on travel, which is unlikely to leave oil demand in China unscathed. In addition, India has said that it is willing to buy Russian oil, which has become considerably cheaper because Western buyers are refusing to purchase it,” he said.

The report added that negotiations between Ukraine and Russia were set to continue after no breakthrough was reached on Monday, and it added that “apart from the humanitarian catastrophe, the conflict has sparked concerns over global economic growth and sent commodities prices surging across the board.”