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March 11, 2019 4:45 PM, EDT

Average Diesel Price Inches Up 0.3¢ to $3.079 a Gallon

Diesel Price Getty Images

The U.S. average retail price of diesel rose 0.3 cent to $3.079 a gallon, according to the Department of Energy, as crude oil prices advanced slightly.

The national average price of diesel is 10.3 cents more than it was a year ago, when the price was $2.976, DOE said after its March 11 survey of fueling stations.

The increase was the fourth consecutive rise in the average weekly diesel price, totaling 11.3 cents.

But average prices for diesel did not rise in every region.

Diesel prices went up the most in the Central Atlantic region, 1.4 cents to $3.315 per gallon. Prices declined in three regions, dropping the most in the Lower Atlantic, 0.4 cent to $2.981.

Gasoline also increased 4.9 cents a gallon, to $2.471 per gallon, according to DOE. But gasoline remains 8.8 cents cheaper than a year ago.

Pressuring diesel upward has been the underlying price of crude oil, which has been inching higher.

Crude futures on the New York Mercantile Exchange closed March 12 at $56.87. That compares with $56.22 per barrel March 6 and $55.16 on Feb. 25.

Oil has rallied more than 25% this year as the Organization of Petroleum Exporting Countries and its allies show commitment to their deal to reduce production and as output in Venezuela declines, according to Bloomberg News. Gains have been limited, though, as U.S. crude production remains at record-high levels, according to Bloomberg.

Oil is likely to go higher in the coming months as warmer weather in spring and summer brings out the motorists, causing demand to peak for the year while supplies of fuel fall. Analysts also fret about the growing problems in Venezuela, a major oil producer.

“Supplies of diesel are below average, and there is chaos in Venezuela,” Phil Flynn, an oil analyst at The Price Futures Group of Chicago, told Transport Topics.

On March 13, DOE reported U.S. crude oil inventories fell by 3.9 million barrels in a week. Total gasoline inventories decreased by 4.6 million barrels in the same week, and distillate fuel inventories, including diesel, increased by 0.4 million barrels in the week but stood 1% below the five-year average for the time of year.

Flynn told TT that gasoline demand is going up week to week, thus depleting inventories. Various factors such as crude oil pricing, Venezuelan output and springtime refinery maintenance, in which output is taken offline, could drive diesel prices up in coming months, Flynn said.

Meanwhile, the U.S. government cut its oil production forecast for the first time in six months as drillers scaled back in smaller shale plays and the Gulf of Mexico, according to Bloomberg.

While crude output still is expected to reach record levels, DOE’s Energy Information Administration trimmed its 2019 forecast to 12.3 million barrels a day — 110,000 barrels a day lower than it had forecast previously, Bloomberg reported. The lower production could keep inventories less full, driving up crude oil prices through 2019.

Trucking companies are readying for changes in diesel prices by keeping abreast of fuel-saving methods.

Robert Ragan

Ragan

In Tulsa, Okla., Melton Truck Lines Inc. Chief Financial Officer Robert Ragan said the company is beta-testing aerodynamic improvements on the fleet.

Melton owns about 1,300 Class 8 trucks. Ragan said the trick to fuel economy for his firm is that it is a flatbed carrier. The lack of a van to contain the cargo means more wind resistance when the flatbeds carry cargo in the open air, Ragan said.

That is why Melton is looking into sideskirts for its flatbeds, something it has not used. The company is testing the skirts, which prevent air from getting under the flatbed, creating resistance, Ragan said.

Since Melton trucks can be dispatched anywhere in the continental United States, idling also can burn diesel fuel. Stefanie Ryan, Melton’s fuel performance supervisor, said in colder months drivers will idle their trucks to keep warm at night.

But at Melton, trucks are equipped with diesel-fired heaters for the cabs, which cuts down on fuel costs in winter, according to Ryan.

In the summer, Melton’s trucks use auxiliary power units to provide air conditioning.

Ragan and Ryan told TT that Melton governs truck speeds and, to motivate drivers further, the company offers regular bonuses to the most fuel-efficient drivers. The bonuses run as high as 25%, which for a selected period can mean $1,300.

Melton ranks No. 92 on the Transport Topics Top 100 list of the largest for-hire carriers in North America.