Demand for Diesel May Heat Up
The national average retail price of diesel fell to 96.5 cents a gallon last week, compared with $1.15 during the same period in 1998. Self-service prices have been falling in most regions of the country, according to figures from the Department of Energy.
On the East Coast, the average price of diesel was 97.4 cents a gallon, down from 99.2 cents three weeks ago. Truckers elsewhere had lower costs last week: 93.7 cents in the Midwest, 94 cents in the Gulf Coast and 99.2 cents in the Rocky Mountains.
On the West Coast, diesel prices took a turn upward and have remained above the national average. Last week, drivers could expect to pay $1.06 a gallon. However, that’s a far cry from the $1.26 they paid during the first week of last January.
Another indicator that higher prices may be on the horizon is more stable crude oil prices.
est Texas Intermediate futures opened the New Year at $12.21 a barrel, up $2 from the 12-year low seen in late December.
The Oil Price Information Service in Rockville, Md., reported that speculators had been covering many of their short positions, mainly in reaction to tensions with Iraq over the “no fly” zones.
Iraq has been exporting as much as 2.5 million barrels of oil a day under the U.N.-supervised oil-for-food deal. Analysts think that Saddam Hussein’s belligerence might jeopardize that flow of crude oil.
In addition to the confidence shown by futures prices, wholesale diesel prices came back by about 5 cents a gallon from their lows. In New York and Chicago commodity markets, spot prices exceeded 35 cents a gallon, after dropping below 30 cents a gallon in late December.
For the full story, see the Jan. 11 print edition of Transport Topics. Subscribe today.
