On-highway diesel prices increased to $2.534 a gallon Tuesday, up 2 cents from the week-ago price of $2.514 on August 31.
Diesel prices usually are announced on Monday of each week but were released Tuesday because government offices were closed Monday for the Labor Day holiday.
Oil was the lowest price since 2009 on August 24 but on August 31 the price jumped after the U.S. Energy Department cut its estimate for the country’s oil production, citing reduced output in Texas. Diesel is just now feeling that jump.
However, oil prices were down Tuesday as global oversupply, a firmer dollar and lackluster U.S. nonfarm payroll data on Friday weighed on oil markets, Reuters reported.
What does that mean? Diesel prices will likely be down again next week.
Diesel was up in nine of the EIA’s 10 reporting sector Tuesday with New England the sole region seeing lower diesel. Truckers there were paying a penny less than the $2.673 they were paying on August 31.
The biggest price increase was in the Midwest, where diesel took a 4-cent price jump from the week prior. Still, it must be remembered that in every sector diesel is ringing up below the $3-a-gallon mark. And the national average of $2.534 today is $1.280 less than it was a year ago at this time. In fact, all 10 sectors, including the Midwest, are over $1 a gallon less than they were a year ago.
According to a Reuters poll, oil prices have gone too low and 2016 should see a gradual upswing in prices which, if true, would pull diesel back up.
The average price of North Sea Brent has been $57.69 so far this year but is predicted by a poll of 30 analysts to average $62.30 a barrel in 2016, Reuters reported.
U.S. crude is predicted to average $57.00 a barrel next year, the poll showed.
Global oil markets have plunged by a third since May and are still well under half their value a year ago because of the oversupply of fuel and sluggish demand. Worries over China's economy have compounded the problem.
But analysts say much lower oil prices over the last few months have sparked demand for fuel in many parts of the world, particularly in the United States and the Middle East, and that oil production growth has also started to fall.
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