The U.S. average retail price of diesel fell 2 cents to $3.007 as crude oil prices rose amid optimism that the economy and energy use would climb along with recent gains in stock prices. Later in the week, oil slipped on rising U.S. inventory levels.
It was the seventh consecutive week with the average diesel price above $3 per gallon.
Trucking’s main fuel is 43 cents a gallon more expensive than a year ago, when the price was $2.577, the Department of Energy reported after its survey of fueling stations.
The average price of diesel fell in every region of the country except California where it rose 0.2 cent to $3.660, according to DOE’s Energy Information Administration.
At the same time, the average price was below $3 in the Lower Atlantic, Midwest, Gulf Coast and Rocky Mountain areas.
As for gasoline, the national average price for regular fell 0.9 cent to $2.548 a gallon, EIA said. The average is 23.4 cents higher than it was a year ago.
Gasoline fell in all regions except the Midwest and West Coast.
The competition for truckers’ fuel spend at the pump is heating up.
TravelCenters of America, the nation’s only publicly traded truck stop chain, reported diesel fuel sales fell in 2017 citing, among other factors, its major competitors expanding to locations near some of its sites.
Its diesel sales at travel centers slipped 3.7% to 1.55 million gallons compared with 1.61 million a year earlier.
TCA has 223 travel centers under the Petro and TA brands in 43 states and in Canada, plus 229 convenience stores and 11 stand-alone restaurants.
During the first three quarters of 2017, 12 competitor sites opened within a 50-mile distance of an existing TA or Petro location, according to the Westlake, Ohio-based company. At its affected locations together, diesel volumes fell in the fourth quarter by about 1 million gallons compared with the same period in 2016.
Pilot Flying J is the largest operator of travel centers in North America with more than 750 locations in 43 states and six Canadian provinces. Love’s Travel Stops & Country Stores is the second-largest with 450 locations in 41 states.
“The competitive sites that are opening are smaller and don’t have the full truck service, food service, parking or the customer service at a typical TA Petro, but a brand new site can appeal to drivers particularly early on. We have done some remodeling and adjusted pricing to combat the competition at these locations,” Barry Richards, TCA’s chief operating officer, said during an earnings call with financial analysts Feb. 28.
The continuing fuel efficiency gains of its fleet customers, and the difficulty those fleets have in hiring sufficient drivers, cut into sales, CEO Andy Rebolz said.
Rebolz said the company would address the increased competition, in part, by expanding its fuel and related services to operators of Class 4-7 vehicles.
West Texas Intermediate crude futures on the New York Mercantile Exchange closed at $63.91 a barrel Feb. 26 compared with $61.90 on Feb. 20. On Feb. 28 they closed at $61.64.
Looking ahead, Bloomberg News reported Saudi oil minister Khalid Al-Falih said cuts by OPEC and its allies may be phased out in 2019 in a way that won’t disturb the market.
The nations taking part in the supply curbs will announce the next steps once they have analyzed what a crude re-balancing will entail, according to Saudi Arabia’s Al-Falih.
Last week’s 3.02 million-barrel increase in U.S. crude inventories exceeded seven of the 10 estimates from analysts in a Bloomberg survey. Gasoline stockpiles swelled by 2.48 million barrels, compared with an average estimate of 600,000 barrels, according to Bloomberg.
Inventories of distillate fuel — primarily ultra-low sulfur diesel used in transportation and to a lesser degree as heating oil — decreased by 1 million barrels last week and are in the middle of the average range for this time of year.
Meanwhile, the weekly U.S. oil rig count was 799 during the week of Feb. 23, one more than the week before and 197 more than a year earlier, oil field services company Baker Hughes Inc. reported.
It was the fifth consecutive week with an increased count, and extended the longest streak of gains in eight months, according to the company.