Diesel Falls 0.8¢ to $3.066 a Gallon
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The U.S. average retail price of diesel dipped 0.8 cent to $3.066 a gallon, the Department of Energy reported Nov. 25.
The price of a barrel of oil increased by almost $1 amid progress in resolving some U.S.-China trade tensions that have reduced demand for petroleum-based fuels.
Trucking’s main fuel costs 19.5 cents less than it did a year ago, when it was $3.261 a gallon, according to DOE.
Regional average diesel prices fell in six areas and rose in four others.
Meanwhile, the U.S. average price of a gallon of gasoline fell 1.3 cents to $2.579 a gallon, according to DOE’s Energy Information Administration.
The price is 4 cents higher than it was a year ago.
Average gasoline prices rose in five regions and fell in four.
Another analyst joined those with questions about the impact of the International Maritime Organization’s rule requiring ocean-going vessels to switch to very low-sulfur diesel (VLSD) and away from bunker fuel by Jan. 1.
“It’s not that ocean-going vessels are going to be running on ultra low-sulfur diesel [like most trucks are]. They will be running on fuel that is one-seventh the sulfur content of what it once was,” Denton Cinquegrana, chief oil analyst, Oil Price Information Service, told Transport Topics.
He said although VLSD was not quite an ultra low-sulfur diesel (ULSD), it still means more competition for the middle of a barrel of oil where ULSD is processed, and soon VLSD, compared with where vessel diesel used to come from, the bottom of the barrel of crude oil.
“So competition for those molecules has the potential to keep diesel prices from falling off too much,” he said.
Cinquegrana said refineries would be processing slightly more oil in 2020 compared with 2019.
“We are probably going to be in the neighborhood of 13 million barrels a day, which is not an insignificant amount considering several years ago we were barely 8 million barrels a day.”
At the same time, EIA reported total U.S. energy-related carbon dioxide emissions in 2018 rose to 5.27 billion metric tons, 2.7% more than its 2017 level. It cited higher natural gas-related emissions and growth in transportation-related petroleum emissions, linked to a strong economy.
U.S. energy-related CO2 emissions declined in six of the past 10 years and were 12% lower in 2018 than in 2005, according to EIA data.
In related news, the North American Council for Freight Efficiency announced its next guidance report — scheduled for release in a few weeks — evaluates the potential for electric and other alternative vehicles as replacements for Class 7 and Class 8 diesels in day cab and sleeper applications.
The report also will look at what it termed “the plethora” of alternative fuels becoming available for this segment of the market.
Also, Alden Woodrow, CEO of automated truck developer Ike, told TT shifting today’s longhaul trips to a model of shorthaul with automated longhaul means transfer hubs could become ideal locations for charging infrastructure for human-driven shorthaul electric trucks handing off to and from automated trucks.
“We expect, though, longhaul operations will continue to use diesel-powered vehicles for some time,” Woodrow said.
West Texas Intermediate crude futures on the New York Mercantile Exchange closed at $58.01 Nov. 26 compared with $57.05 per barrel Nov. 18.
China, in an attempt to address one of the key sticking points in the trade talks with Washington, said it will raise penalties on violations of intellectual property rights. The ongoing impasse has eroded economic sentiment in the world’s two biggest oil users, according to news reports.
Crude has rebounded since early October on signs of progress toward a limited trade deal, but prices have swung back and forth on frequent shifts in sentiment. WTI futures closed at $53.62 on Oct. 1.
“The upswing being enjoyed by prices is due on the one hand to renewed optimism about an initial partial trade deal,” Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt, told Bloomberg News. “Pinning all one’s hopes on this could prove a mistake. There is still no certainty whatsoever that any deal will actually be reached in the next few weeks.”
China’s concession on intellectual property comes as trade negotiators have been trying to bridge the remaining differences including Beijing’s pledges to buy American farm products, protect intellectual property rights and open its economy further to foreign companies. However, the two countries have struggled to agree on what tariffs each side would roll back as part of the agreement’s initial step.
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