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October 13, 2020 6:15 PM, EDT

Diesel Average Nudges Up to $2.395 a Gallon for First Gain in Six Weeks

Truck fills up at Mobil gas stationDaniel Acker/Bloomberg News

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The national average price of diesel increased for the first time in six weeks, inching up eight-tenths of a cent to $2.395 a gallon, according to weekly data released by the Energy Information Administration on Oct. 13.

Still, the price of trucking’s main fuel is 65.6 cents a gallon less than it was a year ago.

The average price of gasoline went in the other direction, falling half a penny to $2.167 a gallon nationally.

Diesel increased in eight of the 10 regions surveyed weekly by the EIA.

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The biggest gain was in the Midwest, where the price rose by 1.6 cents to $2.275 a gallon. Diesel there costs 69.2 cents less per gallon than at this time in 2019.

The Central Atlantic was the only area where diesel did not increase or remain flat; it fell by six-tenths of a cent to $2.649 a gallon. Diesel in that region is 57.8 cents per gallon less than a year ago.

In the East Coast region, diesel remained flat week-over-week at $2.473 a gallon. Diesel there costs 57.1 cents less than it did in the 2019 period.

The most expensive diesel in the country is in California, where it rose six-tenths of a cent to $3.258 a gallon. Diesel in the Golden State is 72.4 cents less per gallon than its 2019 level. The least expensive fuel remains in the Gulf Coast region, home to much of the nation’s oil and gasoline production as well as refining capacity.

There, the price of diesel increased by seven-tenths of a cent to $2.148 per gallon. Diesel is 65.7 cents less expensive than year-ago levels.

Much of the oil and natural gas production in the Gulf of Mexico is returning to normal after Hurricane Delta came ashore Oct. 9.

On Oct. 12, the Bureau of Safety and Environmental Enforcement estimated that 69.4% of oil output in the Gulf of Mexico remained shut due to the storm, along with 47.1% of natural gas production. That marks a significant improvement from Oct. 11, when 91% of oil output and 62% of natural gas production were shut down.

Typically, it takes several days after a storm passes for energy producers to evaluate facilities for damage, return workers and restore offshore production. The companies that operate oil and gas pipelines and process the offshore output also shut ahead of the storm.

Kedzie

Kedzie

American Trucking Associations Vice President for Energy and Environment Affairs Glenn Kedzie told Transport Topics that despite the small increase in the price of diesel, overall, the market has been remarkably stable for the past several months. He added that he would not be surprised if it remains that way for the foreseeable future.

“The highest we have seen this year was the first week of January, when [the] national average was $3.01 a gallon, and the low point was $2.33, $2.34 a gallon, and that’s where we are kind of hunkered down at,” Kedzie said. “We’ve kind of set in this range of $2.40 and $2.50 a gallon nationwide since the middle of April. There’s been very little variation.”

The weekly Baker Hughes rig count shows the number operating in the U.S. increased by three from the previous week to 269. Still, that’s 587 fewer rigs from the 856 in mid-October 2019. In Canada, the number of rose by five to 80. That’s down 66 from last year. Internationally, the number of rigs declined by 45 to 702. Last year, 1,137 were operating at this time.

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Baker Hughes ranks No. 66 on the Transport Topics Top 100 list of the largest private carriers in North America.

Industry analyst Phil Flynn said he also expects diesel and gas prices to remain stable.

“You have to look at the glut in diesel, but a lot of that is an issue with the airlines,” Flynn said, noting that Jet A, burned in commercial aviation, is basically high-sulfur diesel. Because of the COVID-19 pandemic, airlines are using tens of thousands of gallons of fuel less than average every day, creating excess capacity.

Flynn, though, warns oil production could tighten in the coming weeks if the economy improves and more drivers get on the nation’s highways and roads.

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