The U.S. Energy Information Administration’s (EIA) on-highway diesel average is back under $3 a gallon, having dropped from $3.063 a gallon February 12 to $2.992 a gallon March 5.
All but one of the EIA’s 10 reporting regions showed decreased diesel prices and the West Coast less California sector stayed the same as last week.
According to Kiplinger, reports of lower production in Libya and fellow OPEC member Venezuela give traders a reason to bid up crude prices. But at the same time, the International Energy Agency (IEA) in Paris is predicting that robust U.S. output will keep growing for years to come. “The competing narratives about whether the world oil market risks shortages or gluts will no doubt keep oil prices from holding steady for very long,” the Kiplinger report stated.
Benchmark U.S. crude rose 12 cents to $61.37 a barrel in electronic trading on the New York Mercantile Exchange in New York while Brent crude, the international standard, rose 6 cents to $64.43 a barrel, The Associated Press said.
According to EIA, U.S. oilfields should offset slow growth from the OPEC cartel, and globally, new oil production investment hasn’t recovered enough from plunging prices in 2014-2016. If more money isn’t spent on exploration, there will be future shortages and price spikes, said the AP article.
What usually happens is that whatever oil prices do, up or down, is reflected in a week or two in diesel, but if oil fluctuates enough, diesel doesn’t catch up quite as soon.
Probably at this point, analysts’ prediction that oil prices will remain “volatile,” will be the case, so it’s anyone’s guess what oil prices will do and for how long, and whether or when diesel prices will follow suit.
For more details on diesel by region click here.