Oil Drops, Diesel Average Slips to $2.564
The U.S. average retail price of diesel slipped 1.5 cents to $2.564 a gallon and crude oil prices dropped below $49 a barrel as efforts to reduce global production bumped against increased domestic shale production, experts said.
It was diesel’s first decline after three consecutive increases, the Department of Energy reported March 13.
Regional diesel prices fell in all areas.
Diesel now costs 46.5 cents more than it was a year ago, when the price was $2.099 a gallon, DOE said.
West Texas Intermediate crude futures on the New York Mercantile Exchange closed at $48.40 per barrel March 13, compared with $53.20 on March 6.
At the same time, the U.S. average price for regular gasoline declined 1.5 cents to $2.564 a gallon, DOE’s Energy Information Administration said.
Meanwhile, U.S. crude inventories probably rose by 3 million barrels last week, according to the median estimate in a Bloomberg survey before an Energy Information Administration report on March 8.
And new rigs in the U.S. climbed to 768 on March 10, an increase of 12 from the week before, and the highest total since September 2015 — plus 288 more than a year earlier — according to the oilfield services company Baker Hughes.
Baker Hughes ranks No. 14 on the Transport Topics Top 100 list of the largest private carriers in North America.
Oil dropped below $50 a barrel March 9 when it went to $49.28. It had been above $50 since the OPEC and 11 other nations began to trim production Jan. 1.
“What $50 proved was anything $50 or north of $50 a barrel will lead to expanding rig counts and higher U.S. production,” Bill O’Grady, chief market strategist at Confluence Investment Management in St. Louis, told Bloomberg by telephone. “If your goal is to stop growth in U.S. production, you’ve got to have a lower price.”
