U.S. Diesel Average Dips 0.7¢ to $3.911 a Gallon

This story appears in the Jan. 14 print edition of Transport Topics.

The U.S. retail diesel average declined 0.7 cent to $3.911 a gallon last week, the sixth straight decrease, the Department of Energy reported.

Commercial trucking’s main fuel has fallen 12.3 cents during the six-week span and is at the lowest level since $3.85 on Aug. 6, DOE said after its Jan. 7 survey of fueling stations.

Despite falling in 11 of the past 12 weeks, diesel is 8.3 cents higher than a year earlier.

DOE also reported the average pump price for regular gasoline was virtually flat, nudging up 0.1 cent to $3.299 a gallon. The nominal gain was gasoline’s third straight increase, a total of 4.5 cents but 8.3 cents cheaper than for the same week in 2012, according to DOE data.

Also last week, oil prices on the New York Mercantile Exchange traded as high as $94.70 a barrel on Jan. 10, the highest since mid-September, following a series of optimistic global economic reports. Oil had fallen earlier in the week after DOE reported that domestic inventories had increased.

Timothy Hess, an analyst at DOE’s Energy Information Administration, attributed the stable fuel prices to the international crude market, which has been in “a holding pattern” over the past couple months.

“That’s really why you’re not seeing any major increases or decreases in product prices,” he told Transport Topics.

Hess said U.S. diesel and gasoline prices correlate more closely with Brent, because it better reflects international pricing. He said the United States still depends on imports for a significant portion of its crude oil.

Brent oil on the London-based ICE Futures Europe exchange was trading near $111 a barrel last week, and has hovered between $107 and $112 a barrel during the past two months.

Steady prices aside, trucking executives said they are always aiming to reduce fuel expenses.

Witte Bros. Exchange Inc., for example, said it has invested in diesel-electric hybrid refrigerated units and electrification infrastructure at its home terminal in Troy, Mo.

The company estimated it is saving about 100,000 gallons of fuel a year by switching reefers parked at its home facility over to electric power via 80 plug-ins installed at the yard.

“Witte Bros. Exchange has worked diligently over the past five years to implement strategies that create efficiencies within our fleet and for our environment,” Brent Witte, the company’s president, said in a statement. “Our quest began in 2009 with the installation of [auxiliary power units] on our tractors, construction of shore-power stations at our corporate office and the introduction of diesel-electric hybrid refrigeration units into our trailer fleet.”

Witte Bros. expects to have equipped its entire trailer fleet with hybrid reefer units by the end of 2013, a spokeswoman said.

And Larry Kallmeyer, president of truckload carrier Kallmeyer Bros. Enterprises Inc., Hermann, Mo., said his company recently purchased four new trailers equipped with aerodynamic side skirts for use on dedicated longhaul routes.

He said he will consider purchasing more side skirts in the future.

“I really can’t put a number to it at this point, but the drivers seem to think it works better for them on these trips. The trailer seems to pull better,” Kallmeyer said.

Witte Bros. also is testing trailer skirting in its fleet, with 10% of its trailer fleet currently equipped with the aerodynamic products, the company said.

DOE reported last week distillate inventories increased 6.78 million barrels to 130.7 million, while gasoline inventories climbed 7.41 million barrels to 233.1 million.

Looking ahead, the agency projected that diesel prices will remain stable through much of 2013. Diesel will average $3.93 in January and February, before slowly trickling down through the year, hitting $3.78 in December.