Diesel Gas Costs Rise for tenth Week – Gas Smarts

The nationwide common value for a gallon of on-highway diesel gas rose by practically one other nickel over the previous week, with a virtually 17-cent surge in California. It’s the ten^th straight week of will increase for the nationwide common.

After dropping to as little as $3.77 in early July, the typical retail diesel value has risen each week to the newest determine of $4.54 per gallon as of the Division of Vitality’s Sept. 11 report for on-highway ultra-low-sulfur diesel.

In California, the worth is closing in on $6 per gallon at $5.97. The bottom common value was reported within the Gulf Coast area at $4.21.

The common value is down practically 50 cents per gallon in comparison with a yr in the past, they usually haven’t but reached final yr’s excessive of $5.78. But when costs proceed to rise, it may change dynamics within the freight market.

In its Brief Time period Vitality Outlook printed September 12, the U.S. Vitality Data Administration stated its present projection for the typical 2023 value of diesel is $4.31; for 2024 the outlook expects the typical to be $4.07. Nonetheless, these numbers are about 3.5% increased than in its earlier forecast.

In a session at FTR’s convention on September 12, Avery Vise, vice chairman of trucking for FTR, stated that with diesel costs rising and flat spot charges, we may even see extra small motor carriers dropping out of the market.

“This is likely one of the large X components right here,” Vise stated. “If we proceed to see diesel costs rise, that could possibly be a market-changer.”

Crude Oil Costs

Crude oil makes up practically half of the worth of a gallon of diesel, and oil futures costs proceed to rise, with U.S. oil nearing $90 per barrel in buying and selling Tuesday morning. Oil costs have risen by 31% over the previous three months.

Final week, the 2 main oil benchmarks, Brent crude and U.S. West Texas Intermediate (WTI), reached their highest ranges since November 2022, after Saudi Arabia and Russia introduced they’d lower their oil manufacturing by one million barrels per day via the tip of the yr. The 2 international locations are coordinating their actions with OPEC’s oil manufacturing cuts, though they don’t seem to be members.

In its Brief Time period Vitality Outlook, the EIA expects the Brent crude oil value to common $93 per barrel in the course of the fourth quarter of this yr, citing an anticipated decline in international oil inventories within the coming months. This outlook incorporates Saudi Arabia’s September 5 announcement to proceed its voluntary crude oil manufacturing lower of 1 million barrels per day via the tip of this yr. Beforehand, the voluntary lower was set to run out on the finish of September.

Longer-term, the EIA stated, in its forecst, “The value eases to a mean of $87/barrel by the second half of 2024 as a result of we count on international oil inventories to rise throughout that interval.”