Diesel continues climb, oil dips

| 3/7/2005

The national average price-per-gallon for diesel fuel jumped 6 cents Monday, March 7, to $2.168, the Department of Energy reported.

It is the third straight week the national average price of diesel has been above $2 a gallon and is 14 cents higher than the average two weeks ago.

The highest average prices in the nation are found in the West Coast region, where the average cost is $2.450.

The biggest jump was in the Gulf Coast region, where the average price per gallon shot up more than 6cents to $2.100.

Among the higher average prices were in California, at $2.408; the New England region, at $2.288; the Central Atlantic region, at $2.280; and the Rocky Mountain region, at $2.229.

Other prices included the East Coast region, at $2.163; the Midwest region, at $2.113; and the Lower Atlantic region, at $2.102.

Crude oil prices remain high
Meanwhile, crude oil prices fell Monday, but remained above $53 a barrel one day after the president of OPEC said the market is “well supplied.”

Light, sweet crude for delivery in April dropped 58 cents to $53.20 a barrel in afternoon trade on the New York Mercantile Exchange. Heating oil prices dipped nearly 2 cents to $1.464 a gallon.

Oil prices are roughly 52 percent higher than a year ago, up sharply in recent weeks due to continuing cold weather in the Northeast and the possibility that OPEC will slash production to head off a seasonal drop in demand.

OPEC President Sheikh Ahmad Fahad al Ahmad al Sabah said during the weekend that the cartel is concerned by the recent rise in oil prices.

The group was monitoring the market closely and would review the outlook when they gather next week in Iran, “to ensure market stability at a reasonable price,” he told The Associated Press.

Some analysts are anticipating that when the cartel meets March 16, it will cut production to boost prices, which have skyrocketed in the past year because of supply worries.

But Iran’s OPEC minister, Hossein Kazempour Ardebili, said the group’s current output ceiling is unlikely to change. Ardebili told reporters that raising production was out of the question, while trimming the ceiling would send the wrong signal to the market.

“My impression is that we will let the present level continue,” he said.

Some good news
But there is somewhat of a hopeful message for truckers behind all the dollar signs. Despite higher gas prices and oil prices that have come near historic highs, you shouldn’t expect to pay more and more to fill the semi’s tanks as the year goes on.

“I would suspect that diesel prices will start to wane, if they haven’t already peaked,” Fred Rozell, retail pricing director at the Oil Price Information Service, said. “This is the season for gasoline; the season for diesel usually is in fall and winter. That’s when prices usually spike for diesel in anticipation for the winter season.”

That was backed up by other experts. Peter Beutel, president of energy-price tracker Cameron Hanover, told USA Today that in a few days, gas prices could blast upward as much as 24 cents a gallon over the price Thursday, March 3. If that does occur, it will exceed the record for the highest national average price per gallon for gasoline.

But that doesn’t mean truckers are out of the woods.

“Diesel’s up about 10 cents over where it was a month ago,” Rozell said. “At this time last year, the national average was $1.68. Today, it’s $2.17, so it’s a huge difference over last year.”