Fuel

President Obama has signed into law a measure that reinstates a biodiesel tax credit of $1 per gallon.

Recent surveys of carriers and shippers are signaling that slower freight demand growth and continued capacity constraints will be common phrases within the trucking industry during 2011.

U.S. retail motor fuel prices continued to climb last week as both diesel and gasoline reached two-year highs, the Department of Energy said.

U.S. retail diesel has sold at a premium over gasoline throughout 2010, and petroleum market watchers said global competition for the trucking industry’s main fuel likely means that will not change any time soon.

Oil traded near a two-year high close to $90 early Monday as a report showed continued high demand in China, Bloomberg reported.

There are worrisome signs that commodities speculators are returning to the nation’s fuel markets, pushing prices higher than the normal forces of supply and demand would warrant.

U.S. biomass-based diesel producers have the capacity to meet an 800 million-gallon federal mandate in 2011, despite a marked decline in biodiesel production over the past year and a failure by Congress so far to reinstate a $1 per gallon biodiesel tax credit, according to the U.S. Environmental Protection Agency and industry experts.

U.S. retail fuel prices jumped last week, reversing declines over the past two weeks, as the average cost of a gallon of diesel rose 3.5 cents to reach $3.197, the U.S. Department of Energy reported.