EIA predicts an average diesel price of $3.73 this summer

| 4/11/2008

The question on trucker’s mind these days is when will diesel fuel prices drop so it’s a little easier to breathe at the pumps as your earnings get sucked down the tank?

Huge numbers of truckers are running on razor-thin operating margins in order to keep their businesses afloat right now because of record-high diesel prices above the $4 mark and low freight rates.

However, for those that can hang on a little longer and have been paying more than $4 a gallon for fuel, your Uncle Sam says there may be a little relief on the horizon.

The U.S. Energy Information Administration’s Short-Term Energy and Summer Fuels Outlook, released on Tuesday, April 8, projects diesel prices to average around $3.73 this summer – up more than 88 cents from this past summer’s average of $2.85 per gallon.

The EIA is also predicting the national average to be about $3.62 per gallon in 2008, which is up 74 cents from the 2007 average of $2.88 a gallon.

The EIA report cites rising world oil consumption, low global surplus oil production capacity, insufficient non-OPEC oil supply growth relative to demand and supply concerns as being the key factors driving the short-term forecast.

“The global oil market remains fundamentally tight entering the second quarter, despite a slowdown in U.S. oil consumption and growing risks to global economic growth. The combination of rising world oil consumption and low surplus production capacity is putting upward pressure on oil prices,” the EIA report states.

EIA predicts domestic crude oil prices will be about $103 per barrel this summer, which is $29 per barrel higher than average of $74 in 2007. For the year, the price is expected to average $101 per barrel in 2008, according to the agency.

– By Clarissa Kell-Holland, staff writer