Diesel Prices Continue To Rise For Third Week Straight

Following 14 consecutive weeks of declines, the average price per gallon for diesel gasoline continued its upward trend for the third week in a row according to data issued by the Department of Energy’s Energy Information Administration, with a 3.2 cent gain to $2.021 per gallon, resulting in a total of a 4.1 cent increase over the last three weeks.

While that might be a troubling recent trend, consumers are still enjoying a 92.3 cent average cost per gallon decrease over last year, with 50.2 cents of that decrease seen during those 14 weeks of declines.

In the past, diesel had cost more than gasoline because U.S. refineries export much of their diesel output. That leaves less available for the domestic market, and federal taxes are higher for diesel than for gasoline.

But as demand for gasoline has been on the rise around the world, refineries are running at full capacity around the world to meet that demand, and it has resulted in a relative abundance of diesel fuel. Oil analysts have speculated that the drop in diesel would indicate a worldwide glut in crude oil is becoming a glut in refined products as well. This could keep diesel prices at these lower levels well into 2016.

The Wall Street Journal seems to agree, as they reported this week that “fresh signals of global oversupply and weak demand buffeted the market and analysts cautioned that the recent market rally appears unsustainable.” The International Energy Agency recently said oil prices are not expected to recover “in a meaningful way” until 2017.