The average price of diesel jumped 2.2 cents a gallon last week, the biggest leap since April, but analysts who have been calling the summer’s numbers artificially high still think the cost of fuel will stop rising.
On Aug. 16, the Department of Energy reported diesel averaging $1.178 across the country — the highest price since Dec. 1, 1997, and the largest one-week increase since the 2.9 cents posted April 12.
Last week’s upsurge was driven by a 3.1-cent gain in the Midwest average after a pipeline explosion in Texas slowed the flow of crude oil to refineries.
Oil industry watchers for some time have been predicting a price stabilization, and despite the 10th straight week of increases, they continued to say these prices cannot last.
Tom Kloza, editorial director of the Oil Price Information Service in Rockville, Md., said the rising summer prices just are not justified, and a correction to a lower figure is on its way. He predicted the drop would come around Labor Day, as the summer driving season ends and demand lessens.
But Kloza does not see an end to the high prices. He said fuel costs will likely be even higher when winter rolls around and fears about the “Year 2000 problem” set in.
For the full story, see the August 23 print edition of Transport Topics. Subscribe today.
