The U.S. average retail price of diesel set a new low for the year, falling 2.4 cents to $2.465 a gallon, as oil prices coasted along near $43 a barrel, venturing deeper into a bear market, experts said.
It was diesel’s fourth consecutive weekly decline. Diesel prices have dipped by 10.6 cents a gallon since May 29.
Diesel now costs 3.9 cents more than it did a year ago, when the price was $2.426 a gallon, the Department of Energy said June 26.
Each regional price for trucking’s main fuel also fell.
The U.S. average price for regular gasoline sank 3 cents to $2.288 a gallon. The cost is 4.1 cents more than it was a year ago, DOE’s Energy Information Administration said.
Weekly gasoline prices also fell in all regions, EIA said.
The average price for gasoline has dropped 12.6 cents a gallon so far this month.
“Regardless of the price of a gallon of diesel, fuel is one of our largest expenses,” Royal Jones, CEO and president of Mesilla Valley Transportation, said in a statement. “We have made the investment in fuel-efficiency technologies to bring our fuel costs down as much as possible. Every dollar we save in fuel costs goes right to our bottom line.”
Mesilla Valley Transportation, based in Las Cruces, N.M., ranks No. 66 on the Transport Topics Top 100 list of the largest U.S. and Canadian for-hire carriers.
West Texas Intermediate crude futures on the New York Mercantile Exchange closed at $43.38 per barrel June 26, compared with $44.20 on June 19.
U.S. crude drillers added rigs for a 23rd straight week, the longest stretch in three decades, according to data oil field services company Baker Hughes Inc. of Houston released June 23, Bloomberg News reported June 27.
However, “There is scope for oil markets to tighten over the rest of the year,” Kerry Craig, global markets strategist for JPMorgan Asset Management, told Bloomberg. “As those prices stay weak, certainly some of those companies start adjusting their outlook for [capital expenditure] and investment, and that slowly does start to bring rebalance into the market.”
WTI and Brent, the global benchmark, both entered bear-market territory last week, meaning prices have fallen more than 20% from this year’s peaks. Weighed down by rising output from the U.S., Libya and Nigeria, the oil market has now given back all of its gains since OPEC led an historic agreement late last year to cut production, Bloomberg reported.