Diesel Rises 6.3¢ to $3.249; Gas Tops $3
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The national average price of a gallon of diesel climbed 6.3 cents to $3.249, according to Energy Information Administration data released May 17.
The week’s increase was just slightly higher than the 6.2-cent increase of the previous two weeks combined, and diesel has now risen three straight weeks after being unchanged at $3.124 on April 26. Prior to that, the price had dropped four consecutive weeks.
Trucking’s main fuel now costs 86.3 cents more than at this time in 2020.
Average U.S. retail price for #diesel was $3.249/gallon on May 17, up $0.063 from May 10 and up $0.863 from one year ago. https://t.co/rDZG8Nn0Ee
(corrected link) pic.twitter.com/gs17C2Oes9 — EIA (@EIAgov) May 18, 2021
Also, gasoline increased by 6.7 cents a gallon to break the $3 mark for the first time since October 2014 at $3.028 a gallon, which is $1.15 more than a year ago.
Fuel supplies felt the pinch of the Colonial Pipeline cyberattack that temporarily crippled supplies along the East Coast.
Diesel rose in all 10 regions in EIA’s weekly survey, with the largest gain being in the Lower Atlantic (7.9 cents) and the smallest in California (2.1 cents).
Oil futures in New York advanced 1.4% on May 17 to the highest level since April 2019, Bloomberg News reported. The gain was spurred by the U.S. and China, along with parts of Europe, rapidly recovering from the pandemic as vaccinations increase.
West Texas Intermediate for June delivery rose 90 cents to settle at $66.27 a barrel, while Brent for July settlement gained 75 cents to end the session at $69.46 a barrel, the highest since March 11.
Storage tanks are seen at a Colonial Pipeline facility in New Jersey on May 12. (Mark Kauzlarich/Bloomberg News)
The May 7 Colonial Pipeline cyberattack temporarily halted operations for the company, which operates a network of pipelines that spans more than 5,500 miles from Texas to New Jersey. The incident was met with panic buying as well as a swift response from the government and company, which ultimately paid a multimillion-dollar ransom to regain control of its operations.
“I think probably some of the supply issues that were related to the Colonial Pipeline shutdown — I think they’re being resolved,” said Tom Kloza, founder of the Oil Price Information Service. “But it takes a while to catch up to that.”
Buying behavior is also a factor.
“I hesitate to say this because last week was the most viral human behavior I’ve seen since 1978 and 1979 with the Iranian oil crisis,” Kloza said, “but I think the worst is over.” He noted, however, that panic stoked by social media and some media coverage could still push drivers into irrational buying, especially as the historically busy Memorial Day travel weekend nears.
“That’s still a worry,” Kloza said, but noted that after the holiday weekend he projects pricing could normalize. “I would say that prices leading up to Memorial Day weekend for gasoline and diesel — I believe — will be considerably higher than where they are on Father’s Day or the first day of the actual meteorological summer.”
And he’s hopeful that the panic buying surrounding the pipeline shutdown won’t return should other factors put pressure on fuel supplies.
“I think July and August it gets interesting if we get hurricanes, because — in addition to the normal problems with supply that we might see during a hurricane — people have been just revved up and they’re embracing panic behavior,” Kloza said.
U.S. On Highway Diesel Fuel Prices
- Diesel rose in all 10 regions in EIA’s weekly survey, with the largest gain being in the Lower Atlantic (7.9 cents) and the smallest in California (2.1 cents).
- Oil futures in New York advanced 1.4% on May 17 to the highest since April 2019, Bloomberg News reported. The gain is spurred by the U.S. and China, along with parts of Europe, rapidly recovering from the pandemic as vaccinations increase.
- West Texas Intermediate for June delivery rose 90 cents to settle at $66.27 a barrel.
- Brent for July settlement gained 75 cents to end the session at $69.46 a barrel, the highest since March 11.
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