Diesel Price Drop Predicted Despite Recent Increases

The national average price hit $1.539 per gallon on Jan. 29, which was 1.1 cents above the Jan. 22 price, and that was 1.9 cents above the previous week’s price.

Market observers, however, say the forces, such as supply disruptions or unexpectedly strong demand, that would push prices further upward don’t currently exist. The latest cut in the interest rate by the Federal Reserve, announced Jan. 31, could change the picture if it eventually leads to increased oil demand and thus to higher prices (See article, page 7).

“The wholesale price of diesel dropped 5 to 8 cents in the past week,” said Tom Kloza, editorial director of the Oil Price Information Service, who has been predicting lower prices for the past three weeks.