By Seth Clevenger, Staff Reporter
This story appears in the Dec. 19 & 26 print edition of Transport Topics.
U.S. diesel prices climbed in 2011 to an average of $3.84 per gallon as of Dec. 12, about 85 cents higher than last year, and topped the $4 mark in April, May and November.
Phil Flynn, senior energy analyst at PFG Best, Chicago, described 2011 as a year of “ups and downs” for diesel, with the return to $4 prices in the spring followed by “the big break in October” and then “the big rally” as the end of the year drew near.
After beginning the year at $3.331, the average price of U.S. retail diesel increased in 16 of the first 18 weeks of the year, according to the Department of Energy.
Diesel surged a combined 29.8 cents in two weeks on Feb. 28 and March 7, followed by a 10.2 cent jump on April 4 that lifted diesel above $4 for the first time since September 2008. Prices remained over $4 for six weeks in April and May.
Trucking’s main fuel peaked at $4.124 on May 2, the highest price in nearly two and a half years.
Diesel then followed a slight downward trend over the next five months, dipping as low as $3.721 on Oct. 10, but prices rose sharply near the end of the year.
Diesel climbed 10 cents on Nov. 14 and then rose back above $4 to $4.01 on Nov. 21. The average price decreased to $3.964 a week later.
The first diesel price of 2011 was also the year’s lowest. Diesel never again dipped as low as $3.331, the price in DOE’s Jan. 3 survey.
Gasoline also increased, topping out at $3.965 on May 9.
Through Dec. 12, gasoline prices averaged $3.53 a gallon, an increase of about 75 cents over the average price in 2010.
The price of gasoline increased in 17 of the first 19 weeks of the year, including back-to-back jumps of 19.4 cents and 13.7 cents on Feb. 28 and March 7.
After hitting its high point in May, gasoline trended downward for the rest of the year, hitting $3.274 on Dec. 12.
Hurricane Irene and flooding along the Mississippi River disrupted supplies earlier in the year and now “insatiable demand for distillates across the globe” is pushing diesel prices upward, PFG Best’ Flynn said.
Flynn also said the emergence of the United States as a net exporter of diesel fuel has contributed to rising prices.
In the week that ended Dec. 2, the United States exported 948,000 barrels of distillate fuel per day, compared with 777,000 barrels in the same week a year ago, according to DOE.
Neil Gamson, an economist for DOE’s Energy Information Administration, cited several other factors that placed upward pressure on diesel prices this year, beginning with the rising price of crude oil.
Crude oil, which closed at $91.55 per barrel on Jan. 3 at the New York Mercantile Exchange, began its ascent in late February and topped $100 on March 2.
The year’s highest closing price was $113.93 on April 29. Crude hit its lowest closing price — $75.67 — on Oct. 4, but crude oil prices picked up again and were hovering around $100 in late November.
