By Jonathan S. Reiskin, Associate News Editor This story appears in the April 21 print edition of Transport Topics.
The average retail price of U.S. diesel dipped for a fifth straight week, falling 0.7 cent a gallon from the previous week to $3.952, the Department of Energy reported.
The national average has dropped by 6.9 cents since hitting a 12-month high of $4.021 on March 10.
Gasoline, conversely, continued to move in the opposite direction. It rose 5.5 cents a gallon to $3.651, the latest step in a 35.9-cent surge over 10 weeks, DOE said after its April 14 survey of fueling stations.
A year ago, diesel was cheaper by 1 cent a gallon on average, DOE’s Energy Information Administration said. Gas is 10.9 cents a gallon more expensive than last year at this time.
Denton Cinquegrana, chief oil analyst with Oil Price Information Service, said refiners are making as much diesel as possible because profit margins are higher than for gasoline. Demand also is broader, he said, with U.S. exports to South America competing with domestic diesel usage.
“Gasoline should be pretty close to peaking,” Cinquegrana said. Over the past 30 years, gasoline futures have peaked in late April, on average, and retail prices around Memorial Day.
Looking at the past five years, though, Cinquegrana said the peaks are coming earlier, and he estimates gas prices being higher at Easter than on Memorial Day. He said the two components of the spring increase are refineries switching production to more complicated
summer-blend gasoline and more passenger cars hitting the road.
He anticipates “steady” diesel pricing in coming months that might get somewhat cheaper, but not significantly so.
Trucking executives said they were trying to find ways to scrape together savings where they can find them.
“We live fuel every day,” said Tim McCormick, chief operating officer of Fremont Contract Carriers in Fremont, Neb. His company owns 170 power units and uses the services of 150 independent contractors to run throughout the 48 contiguous states and parts of Canada.
McCormick said FCC’s efforts accelerated in 2008 as the country fell into recession. Management governed top engine speed, installed auxiliary power units, added aerodynamic fairings to trailers and reduced engine sizes on some trucks.
“We used to be all 15-liters, now there are some 13-liters. We’re spec’ing for economy,” McCormick said.
At High Mountain Transport in Lockwood, Nev., company President Mark Menezes said he monitors miles per gallon to the tenth of a decimal point. Although he mainly buys used trucks for his drayage hauls out of the Port of Oakland, he also follows trends in new equipment carefully for his fleet of 27 trucks.
Although his heavy loads have to cross Donner Pass in the Sierra Nevadas, Menezes said he’s been able to improve fuel economy by 0.4 to 0.5 mpg in recent years.
Both carrier executives said they have lowered their gear ratios, meaning it now takes fewer driveshaft turns to get the drive wheels on their tractors to turn once.
EIA also said the nation’s crude inventory hit 394.1 million barrels April 11 — a 10 million-barrel increase over the previous week.
Prices for crude oil futures on the New York Mercantile Exchange were usually less than $104 a barrel last week before closing at $104.30 on April 17.
