LITTLE ROCK, Ark. — Diesel fuel prices are on the rise once again this week — at least in most areas of the nation.
According to the Energy Information Administration (EIA), the average price for a gallon of diesel fuel around the U.S. sits at $4.593 as of Oct. 2. That’s up from $4.586 on Sept. 25.
There were some areas of the nation that saw declines in prices, however.
In the Central Atlantic region, prices fell from $4.764 on Sept. 25 to $4.759 on Oct. 2, according the EIA.
The Gulf Coast region also saw a slight decrease as well, with the price falling from $4.281 on Sept. 25 to $4.279 on Oct. 2.
The Rocky Mountain region saw prices drop from $4.801 on Sept. 25 to $4.778 on Oct. 2, and the West Coast (minus California) saw prices decline from $5.229 on Sept. 25 to $5.190 on Oct. 2.
Oil prices have risen, meaning drivers are paying more for gasoline and truckers and farmers more for diesel.
Above all, Saudi Arabia’s decision to cut back how much oil it sends to global markets has pushed prices higher.
The world’s second-largest oil supplier has slashed production by 1 million barrels a day since July and decided this month to extend the cut through the end of the year.
Russia, Saudi Arabia’s ally in the OPEC+ oil producers’ coalition, also extended its own cut of 300,000 barrels a month through 2023.
Simply, tighter supply means higher prices.
International benchmark Brent oil traded at just under $94 per barrel Monday, up from $90 before the extension on Sept. 5 and from $74 before the Saudi cut was first announced. U.S. oil traded at around $90.50, up from $68 before the Saudi cut.
Some analysts think oil could hit $100 a barrel based on robust demand and limited supply. But that’s far from the only view.
Oil prices can be volatile, and while they might briefly top $100 in the coming months, they’re unlikely to stay there, said Jorge Leon, senior vice president for oil markets at Rystad Energy. He foresees prices in the low $90s on average in the last three months of the year.
That’s still high historically, he said, supported by “resilient” demand for fuel to drive and fly.
The Saudi cuts were a unilateral move outside the framework of the OPEC+ alliance, meaning the kingdom can make changes as needed to quickly respond to shifting market conditions.
Leon said the Saudis will review the cuts each month — and could add barrels back if prices spike to levels that could seriously worsen inflation in countries buying oil. Excessive price increases could mean central banks worldwide hike interest rates further or keep them higher for longer.
“I don’t think it will be clever for the Saudis to push that hard,” Leon said. “The last thing you want to do is fuel inflation again with much higher oil prices. That’s going to kill economic growth, and lower growth is going to mean lower oil demand at the end of the day.”
The Associated Press contributed to this report.
The Trucker News Staff produces engaging content for not only TheTrucker.com, but also The Trucker Newspaper, which has been serving the trucking industry for more than 30 years. With a focus on drivers, the Trucker News Staff aims to provide relevant, objective content pertaining to the trucking segment of the transportation industry. The Trucker News Staff is based in Little Rock, Arkansas.