Diesel Dips 6.2¢ to $3.835

The national average price of diesel fuel declined for a third straight week, dipping 6.2 cents to an almost six-month low of $3.835 a gallon, according to the Department of Energy.

Gasoline, meanwhile, fell for a second week, dropping 7 cents to $3.604 a gallon, DOE said following its Aug. 15 weekly survey of filling stations.

The downturns followed lower crude oil prices, which declined from the $90s-per-barrel in June and July to the $80s this month.

Diesel has retreated 11.4 cents in the past three weeks and almost 29 cents since peaking at $4.124 a gallon in early May, the highest level since August 2008.

Last week’s diesel price was the lowest since it was $3.716 in late February. Despite the declines, diesel is still 85.6 cents a gallon higher and gas is 85.9 cents above the comparable week of last year.

With weakened demand for both diesel and gasoline, prices are likely to remain lower going forward, one energy analyst said last week.

“We shouldn’t go up again, that’s for sure, and I think we’ll see prices continue to weaken,” said Andrew Reed, a diesel specialist at Energy Security Analysis Inc., Wakefield, Mass.

Reed said ultra-low-sulfur diesel wholesale prices have dropped about 20 cents from July and that “we could see prices soften by another 20 cents per gallon” in the near-term, which would translate to lower pump prices.

He cited lower global oil demand due to sluggish economies in the United States and Europe as a reason for falling oil prices.

“Gasoline is part of the story, too,” Reed said. “High pump prices earlier this summer weakened U.S. demand. With a slower [summer] driving season, crude demand gets weaker,” lowering the price of oil, the major driver of end-fuel prices.

Truckers welcomed the relief, following the more than two-and-a-half year high prices of spring and early summer.

“It is good news for us, and our customers,” said Rick Roberts, assistant controller at Bettendorf Enterprises Inc., Arcata, Calif. “We pass along the increase, or decrease, to them.”

Roberts said the combined average price in Northern California for its bulk fuel and discounted commercial fueling network purchases fell 26 cents to $3.71 a gallon in the first two weeks of August, from $3.97 in July.

The regional truckload carrier — which hauls wood products and trash — operates more than 100 power units in Northern California and its divisions in Oregon and Washington state.

Besides setting speed governors at about 62 mph, “each terminal has a manager who makes drivers aware of what they can do to save fuel,” Roberts said.

“The managers emphasize conservation, and we also have maintenance managers at all our terminals who stay on top of it,” he told Transport Topics.

Most of its trucks and trailers also have fairings — wind deflectors to make them more streamlined, Robert said. “It makes them more aerodynamic; they’re talking about a 1 or 2 mpg difference.”

Scott Brock, operations manager at Brock Trucking Inc., Vesper, Wis., said his fleet also uses speed governors to regulate its trucks at about 66 mph.

Brock Trucking, which runs about 35 dry vans and reefers, operates in the lower 48 U.S. states but relies as much as possible on its own bulk tanks to save on fuel costs.

“We have our own fuel tank on site and tell our drivers to try to get back home close to empty,” Brock said. “With 200 or 300 gallons, it adds up.”

Using fuel from its 12,000-gallon bulk tank can save the company as much as 10 cents a gallon, he said, and “when it starts dropping, we can buy it cheaper.”

Meanwhile, crude prices fluctuated last week as DOE reported that oil and diesel supplies both rose in the second week of August, although gasoline stockpiles slipped as refiners cut output, Bloomberg News reported.

Crude inventories jumped 4.2 million barrels and distillate stockpiles gained 2.5 million barrels, DOE said in its weekly inventories report Aug. 17. Distillate supplies, which include diesel, rose to 154 million barrels, the highest level since March.

Gasoline supplies fell 3.5 million barrels — the biggest drop in four months — as output fell 2.2% to 9.32 million barrels a day, leaving supplies 2.8% lower than a year ago.

The gasoline decline “was an example of inventory management by refiners,” Tim Evans, an energy analyst with Citi Futures Perspective in New York, told Bloomberg News.

Oil rose almost $1 to finish at $87.58 a barrel on the New York Mercantile Exchange following the report, buoyed by reports of higher-than-expected sales from retailers, including Target Corp. and Staples Inc., Bloomberg News said.

Meanwhile, the U.S. Strategic Petroleum reserve said it has delivered 20.4 million barrels of oil since mid-July following the DOE’s June announcement that it would open the SPR in tandem with the International Energy Agency, in a bid to relieve high world oil prices (6-27, p. 1).