Diesel Average Climbs 3.9¢ to $2.409; Gasoline Increases 4.4¢ to $2.237
This story appears in the Sept. 5 print edition of Transport Topics.
The U.S. average price of diesel rose 3.9 cents to $2.409 per gallon last week, according to the Department of Energy as the price of crude hovered near $47 amid speculation that a glut of oil could be easing.
Diesel was 10.5 cents cheaper than it was a year ago when the price was $2.514, DOE said after its Aug. 29 survey of fueling stations.
It was diesel’s second consecutive weekly increase after seven straight weeks of declining prices. It jumped 6 cents the previous week.
DOE said prices climbed in all regions — the highest in California at $2.741 and lowest in the Gulf Coast region at $2.269.
The U.S. average price of regular gasoline climbed 4.4 cents per gallon to $2.237, which is 27.3 cents cheaper than a year ago, DOE’s Energy Information Administration reported.
It was gasoline’s second rise in a row, too. It jumped 4.4 cents the week before, after nine consecutive weekly declines. All regions posted higher gasoline prices, EIA said. It also was lowest in the Gulf Coast region at $2.009 and highest on the West Coast at $2.592.
The climbing fuel prices reflect crude’s sharp price rise during August, said Ben Brockwell, director of data, pricing and information at the Oil Price Information Service in Gaithersburg, Maryland.
“Crude oil has the biggest say of all in this,” Brockwell told Transport Topics.
During August, the price of crude rose 22% to $48.52 on Aug. 19, compared with $39.51 on Aug. 2, and then backed off, he said.
“Crude oil went way up, and diesel and gas did not move. Now you have those products starting to reflect that advanced crude price,” Brockwell said.
For private fleets especially, the best way to manage fuel is to manage data during their trucks’ longer life cycle — about seven years — said Mike Spence, senior vice president of fleet sales at Fleet Advantage.
“Most people still believe the engine is still going to continue to perform well [in the extended life cycle]. But there is this thing called fuel-mileage degradation which begins to occur after an engine gets some wear or at a point where some of the emissions systems need to be cleaned,” Spence said.
The question becomes whether to adjust maintenance schedules or upgrade to a newer truck, he said.
“That’s a big part of our program. We watch fuel economy mile after mile and when it gets to the point where it begins to deteriorate we believe that is the proper time to consider replacing the vehicle if market conditions are right,” Spence said.
Fort Lauderdale, Florida-based Fleet Advantage provides truck leasing and matching proprietary data-driven technology processes for its customers.
Spence said the company recently began marketing its services to for-hire fleets with 100 to 300 trucks.
Meanwhile, crude trading on the New York Mercantile Exchange closed at $46.35 per barrel Aug. 30. Futures have climbed 23% in less than three weeks as some Organization of Petroleum Exporting Countries members raised the possibility of an output freeze amid signs the global glut is easing.
“I think this is a false front and it is moving on sentiment and emotion and not on fundamental factors,” Brockwell said. “There is still way more supply being produced at the refinery level than is being consumed at the consumer level. Until that changes, the market is going to have these moments where it wants to go higher because there may be a feeling or a sentiment that things are changing.”
