Cold Snap Drives Up Price Of Diesel in New England

A blast of bitter cold throughout the Northeast is being blamed for a 6.7-cents-a-gallon leap in the retail price of diesel fuel in New England, to $1.441 on Jan. 17. But the average national price, as reported by the Energy Information Administration the same day, remained at $1.307 a gallon for the second week.

	Fuel Prices
	Week of Jan. 17:
	source	price	change
	DOE	130.7	0
	Comdata	128.6	-0.3
	OPIS self-serve	129.7	-0.5
	OPIS wholesale	73.4	-1.7

The New England spike, said Diego Saltes, an analyst with the Economics and Statistical Analysis Department of American Trucking Associations, resulted from increased consumption of heating oil. Temperatures in the Northeast dropped sharply the week of Jan. 10, boosting demand for heating oil. Both diesel and heating oil are distillates, with similar price and supply patterns.

Analysts disagree about the factors determining the current price of diesel. Throughout 1999, production quotas by the Organization of the Petroleum Exporting Countries pushed oil prices up to levels not seen since the 1991 Persian Gulf War, closing Jan. 19 above $29 a barrel. Rising oil prices carried the retail price of diesel fuel from 95 cents a gallon last February to the current price above $1.30.

Now, however, diesel prices are being driven by falling inventories and single-digit temperatures, said Tom Kloza, editorial director of the Oil Price Information Service. The wholesale price stood at 85 cents on Jan. 19, up 15 cents from the beginning of the year and up 53 cents from a year ago. Kloza said it is likely to rise above 90 cents.

For the full story, see the Jan. 24 print edition of Transport Topics. Subscribe today.