Diesel Prices Follow Crude Oil Rise

The national average price of diesel fuel rose 0.4 cent to $1.198 a gallon on Sept. 6 — the smallest increase since July 26 — but analysts saw scant hope for price moderation in the face of a 23-month high in crude oil prices.

The price of crude oil in the New York Mercantile Exchange went to $22.68 a barrel on Sept. 8, the highest price since Oct. 3, 1997, when it stood at $22.78.

After reaching a historic low of 95.3 cents a gallon on Feb. 22, diesel prices have risen steadily, with only a few pauses in the march to the current level. Diesel followed the NYMEX price of crude oil, which hit its 52-week low of $10.73 a barrel on Dec. 10 and began its move to more than $20.

“I’d like to have some good news [for the trucking industry], but I can’t see any,” said Tom Kloza, editorial director of the Oil Price Information Service.

Kloza continued to predict that prices could drop as they usually do in November or early December.

He also said they could begin to fall next year if members of the Organization of Petroleum Exporting Countries break the discipline they have maintained regarding production quotas. By limiting their output of oil, the OPEC nations have succeeded in driving up prices, but analysts have often questioned their resolve in keeping to the production caps.

“But all the elements are in place for a nasty little spike in the fourth fiscal quarter,” Kloza said.

The main element, he said, is worldwide demand for crude oil that outstrips supply by 2 million barrels a day.

For the full story, see the Sept. 13 print edition of Transport Topics. Subscribe today.