National diesel average declines but remains at a high level, for week of May 23
The national average price per gallon for diesel gasoline decreased, for the week of May 23, while remaining at a high level, according to data issued this week by the Department of Energy’s Energy Information Administration (EIA).
The weekly average came in at $5.571 per gallon, down 4.2 cents from the national average, for the week of May 16, at $5.613, and it also trailed the week of May 9, the all-time record, at $5.623.
Prior to the last three weeks, the national average saw the following: a 3.49-cent increase, to $5.509, for the week of May 2, a 5.9-cent increase, to $5.160, for the week of April 25, a 2.80-cent increase, to $5.101, for the week of April 18, a 7.1-cent decline, to $5.0753, for the week of April 11, and a 4.1-cent decline, to $5.144, for the week of April 4. Prior to that, the national average was up $5.1 cents, for the week of March 28, to $5.185 per gallon, preceded by an 11.6-cent decline, to $5.134, for the week of March 21.
What’s more, prior to the last nine weeks, the national average price per gallon had seen ten consecutive weeks of gains—from the week of January 10, at $3.657, to the week of March 14, at $5.25, for a cumulative $1.593 gain over that period. And over the last eight weeks, the national average has topped the $5 per gallon mark, with the week of March 14 representing the first time ever the national average was above the $5 per gallon mark.
On an annual basis, this week’s national average is up $2.318, trailing the annual spread, for the week of May 16, at $2.347.
West Texas Intermediate Crude oil is currently trading at $110.12 on the New York Mercantile Exchange.
Even though President Biden recently signaled the nation’s intent to produce one million additional barrels, from the nation’s Strategic Petroleum Reserve (SPR), on average—every day—for the next six months, due to the significant run-up in gas and oil prices since the beginning of the Russia-Ukraine conflict, with freight transportation and supply chain stakeholders, as well as consumers, feeling tremendous pain at the pump, oil and gas prices appear to be holding steady, for the most part, at the moment.
A survey from AAA showed that diesel prices have set new daily average records in recent weeks. What’s more, EIA data showed that East Coast diesel inventories are far below typical levels.
Driving the decline in inventories is increased demand following the pandemic, as supply remains tight, according to a CNBC report, with these record-level prices adding to inflationary concerns.
“Diesel is the fuel that powers the economy,” said Patrick De Haan, head of petroleum analysis at GasBuddy, in the report. Higher prices are “certainly going to translate into more expensive goods,” he said, since these higher fuel costs will be passed along to consumers. “Especially at the grocery store, the hardware store, anywhere you shop.”
A New York Times report observed that diesel and jet fuel prices have been rising faster than gasoline, putting further inflationary pressure on agriculture, shipping and travel.
Cowen analyst Jason Seidl wrote in a research note that as U.S. diesel prices remain elevated—and passing along significant costs to shippers in the form of fuel surcharges—that sustained high diesel pricing will ultimately benefit the railroads and IMCs as shippers explore different modes of transport.
“We looked at a move…between Newark, NJ and St. Louis Missouri (roughly a 960-mile route),” wrote Seidl. “A shipper would have been quoted to pay ~$2,400 for full truckload and ~$1,800 for intermodal (with a 1-day delivery differential). That suggests that a shipper would pay 33% less in transportation costs hauling via intermodal (well above the normal pricing differential between the modes), at the expense of one extra transit day.”
