The U.S. average retail price of diesel increased ever so slightly the week of Feb. 4, rising to $2.966 a gallon, one-tenth of a cent higher than last week.
It was the first price increase in diesel since mid-October, but diesel is 12 cents a gallon cheaper than it was a year ago, according to the U.S. Energy Information Administration.
Diesel prices had been falling steadily since reaching a peak of $3.395 a gallon during the week of Oct. 15. The price dropped 14 straight weeks and then remained flat at $2.965 per gallon last week. Strong world supplies of crude oil, mixed with concerns that the global economy would slow down, have helped reduce oil and diesel prices.
The average cost of diesel decreased in all regions except the Midwest, where the price rose to 3.3 cents to $2.839 per gallon.
The national average price of gasoline decreased 0.2 cent, dropping from $2.256 to $2.254.
On Feb. 6, confidence about future oil demand pushed West Texas Intermediate crude for March delivery up 35 cents to $54.01 a barrel, at the close of New York Mercantile Exchange trading. The rebound came after an EIA report showed surprisingly strong gasoline demand and a drawdown of heating fuels in the United States, tempering fears of a global oversupply, Bloomberg News reported.
In the next few weeks, the oil price could top $60 per barrel, approaching the $70 mark, once more demand materializes and once Venezuelan sanctions hit, according to Phil Flynn, an oil analyst for The Price Futures Group in Chicago.
“By April, we have a good shot to be in the range of $60, maybe the higher $60-to-$70 range,” Flynn told Transport Topics.
Among the factors that could lead to higher oil prices are deeper sanctions against Venezuela, a major supplier of oil, and cuts in production by OPEC and Russia. Flynn said it’s possible U.S. oil production could flatten in the coming months.
The wild card would be a great deal between the United States and China, Flynn said. Concerns about trade and tariffs between the world’s largest two economies have dampened speculation that oil prices could rocket. The announcement of a U.S.-Chinese trade deal could instill new confidence into energy markets, Flynn said.
Old Dominion Freight Line trailers. (TT File Photo)
With diesel prices possibly increasing as the year goes on, fleets maintain fuel-efficient practices.
Bill Goins, a linehaul driver for Old Dominion Freight Line Inc., avoids hard accelerations and hard braking when he drives from Indianapolis to Nashville, Tenn., on his daily route.
Old Dominion ranks No. 11 on the Transport Topics Top 100 list of the largest for-hire carriers in North America.
Goins, a captain on American Trucking Associations’ 2019-20 America’s Road Team, has worked as a full-time driver since 1992 and has worked for Old Dominion for the past five years.
Goins’ Old Dominion truck has a manual transmission, so knowing how to handle the shifting is key to economy, he said, as well as the use of skirts on the sides of the trailer to help with fuel efficiency.
“They divert wind down the side of the trailer,” Goins said.