Diesel Climbs 1.1 Cents to $3.073 a Gallon
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The U.S. average retail price of diesel rose 1.1 cents to $3.073 a gallon, the Department of Energy reported Nov. 12.
Trucking’s main fuel costs 24.4 cents less than it did a year ago, when it was $3.317 a gallon, according to DOE.
U.S. average #diesel fuel price on 11/11/2019 was $3.073/gal, UP 1.1¢/gallon from 11/04/19, DOWN 24.4¢/gallon from year ago https://t.co/PFE2TNrgkp #truckers #shippers #fuelprices pic.twitter.com/ipP7YVa6ku— EIA (@EIAgov) November 13, 2019
Regional average diesel prices rose in all areas except the Gulf Coast, where the price was unchanged at $2.795.
The price of a barrel of oil was flat.
Also, the U.S. average price of a gallon of gasoline rose 1 cent to $2.615 a gallon, according to DOE’s Energy Information Administration.
The price is 7.1 cents less than it was a year ago.
Average gasoline prices rose in six regions and fell in three: East Coast, Lower Atlantic and West Coast.
U.S. average price for regular-grade #gasoline on 11/11/2019 was $2.615/gal, UP 1.0¢/gallon from 11/04/19, DOWN 7.1¢/gallon from year ago https://t.co/qyR3bDAcJ3 #gasprices pic.twitter.com/i9p1WCSGoE — EIA (@EIAgov) November 13, 2019
A top executive at a publicly traded fleet forecast higher diesel prices next year and said it was prudent to be concerned when the magnitude of new International Maritime Organization rules on low-sulfur diesel touches trucking, too.
Beginning in 2020, diesel-guzzling ocean carriers, which use as much as 4 million barrels of diesel a day, will switch to low-sulfur diesel with a 0.5% limit compared with the 3.5% content they use now, under regulations the IMO issued.
Derek Leathers, CEO of Werner Enterprises Inc., said in a recent earnings report that he believes no one in trucking knows what the outcome is going to look like.
“I’ve seen people say they think it’s a relatively nonevent. I don’t agree with that. I’ve also seen people talk about 70 cents- to $1-type spikes in diesel. I think that’s a bit overstated. I think somewhere in that goalpost is where it falls out,” he said.
Werner Enterprises ranks No. 15 on the Transport Topics Top 100 list of the largest for-hire carriers in North America. It operates about 7,900 tractors.
The U.S. fleet of trucks consumes about 22 billion gallons of diesel fuel every year, according to the Diesel Technology Forum.
Leathers said the industry has to keep developing ways to improve miles per gallon and fleets must ensure fuel surcharges are “adequate and appropriate based on the work we do for our customers.”
Any increase could especially hurt where all-in rates are in effect or with logistics operations, he said.
He is thinking well in advance of the change, he added, “to make sure our rating and our rating engines are prepared for it.
“I feel confident we’re looking at it, the right things the right way. And I think it’s going to happen. I don’t think there is going to be some last-minute save that’s going to save the day. We’re going to see diesel go up.”
Recently, the American Transportation Research Institute reported fuel prices in 2018 accounted for a leading 17.7% of operational costs for fleets. The cost of fuel went from 36.8 cents per mile in 2017 to 43.3 cents in 2018.
At the same time, one of the world’s largest oil companies is pursuing alternative fuels research, in particular a biofuel-like algae.
Exxon Mobil Corp. has invested $10 billion on low-emission technologies research overall, said Neil Hansen, vice president of investor relations, during the company’s recent earnings call. “Everyone’s aware of the advances being made on the light-duty side, but on the commercial transportation, heavy-duty aviation, we think we need a biofuel solution.”
Exxon’s program to grow algae as a transportation fuel has a goal of producing 10,000 barrels a day of algae fuel by 2025.
“We believe our work with algae offers some of the greatest promise for next-generation biofuels, which is why Exxon Mobil has committed hundreds of millions of dollars to algae research,” the company said in a release.
Oliver Fetzer, CEO of Synthetic Genomics, Exxon’s partner in the project, said, “Our outdoor algal facility creates a perfect steppingstone from our labs to the greenhouse and to the outdoors to lay the foundation for a large-scale commercial deployment of our technology in the future.”
West Texas Intermediate crude futures on the New York Mercantile Exchange closed at $56.80 Nov. 12 compared with $56.58 per barrel Nov. 4.
Based on preliminary data and model estimates, EIA estimated the United States exported 140,000 barrels a day more total crude oil and petroleum products in September than it imported; total exports exceeded imports by 550,000 barrels a day in October. If confirmed in survey-collected monthly data, it would be the first time the United States exported more petroleum than it imported since EIA records began in 1949.
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