November 29, 2022
U.S. Diesel Average Drops Another 9.2 cents
The U.S. average price for diesel fuel has dropped for the third week in a row, defying expectations that trucking’s main fuel would surge on fall-to-winter inventories that dipped recently to a nationwide supply of less than a month.
The price of diesel has fallen 17.2 cents in the past two weeks. The diesel average was down 9.2 cents to $5.141 per gallon, according to U.S. Energy Information Administration (EIA) data for the week of Nov. 28, and the fuel declined in every region of the country. This decrease follows an 8-cent drop for the week of Nov. 21 and a slight 2-cent decline for the week of Nov. 14. Motor club AAA had the U.S. diesel average down 8.3 cents to 5.215 per gallon on Nov. 28 compared to the prior week.
All these declines come amid the backdrop of predictions that prices of distillates—diesel but also home heating oil and jet fuel—would surge when supplies dropped in October to their lowest levels since 2008 to about 25 days of supply. But for the week of Nov. 18, distillate inventories started rising, by 1.7 million barrels that week, according to EIA, though they were still about 13% below the agency’s average for this time of year.
Now new signs have emerged that the past weeks of weaker demand for the fuel have started to rebuild diesel inventories and ease fears that supply shortages will drive prices back up. The U.S. average is now $1.421 more per gallon than a year ago but sits at its lowest since the first week of October.
Sky-high diesel has been well-documented this year. Historically, trucking’s main fuel shot up to above $4 after Hurricane Katrina hit the Gulf Coast in 2005, but it’s been consistently over $5 a gallon in 2022 and to an all-time high of nearly $6—$5.81 per gallon—in mid-June.
Trucking is clearly concerned about fuel prices, various sectors more so (small fleets and owner-operators) than others (larger fleets have more access to fuel surcharges and bulk discounts on diesel). In late October, the American Transportation Research Institute released its annual survey of top industry concerns, and the price of fuel topped the survey.
Even better news in all U.S. regions
For now, trucking's main fuel is down in every region of the U.S. The Midwest, where diesel dropped 12.3 cents to $5.108 per gallon, led the way, followed by the Gulf Coast, where it was down 8.3 cents to $4.699. Diesel was also 7.8 cents lower on the West Coast to $5.666, 7.5 cents lower on the East Coast to $5.336 a gallon. The fuel was down the week of Nov. 28 in the Rocky Mountain region by 4.6 cents to $5.392.
Plus, the price of crude is starting to hover below $80 per barrel, which is its lowest in many weeks, another indicator that price pressure might be easing for now.
The U.S. average price for gasoline was down another 11.4 cents (the identical decrease as the week before) to $3.534 per gallon and was again down in every region of the country for the week of Nov. 28. Gas has fallen in price faster than diesel, widening the gulf between the fuels. Gas is used widely by consumers and by some commercial fleets and is now almost $1.61 cheaper than diesel per gallon.
Source: Fleet Owner