Diesel prices sit again at above $5 as oil producers begin production slashes

LITTLE ROCK, Ark. – Average diesel prices across the nation are once again sitting firmly above $5 per gallon after several weeks of staying below $4.

According to the Energy Information Administration (EIA), the average price for a gallon of diesel fuel in the U.S. on Oct. 10 sat at $5.22 per gallon. That’s up from $4.89 per gallon on Oct. 3.

Diesel prices have fluctuated at or below $5 a gallon since early August, when average prices dipped below $5 for the first time since March.

Meanwhile, major oil-producing countries led by Saudi Arabia and Russia have decided to slash the amount of oil they deliver to the global economy, which is likely to drive prices even higher in the coming weeks.

The decision by the OPEC+ alliance to cut 2 million barrels a day starting next month comes as the Western allies are trying to cap the oil money flowing into Moscow’s war chest after it invaded Ukraine.

The highest prices for a gallon of diesel can be found in California, where, on average, a gallon costs $6.48.

The lowest prices are along the Gulf Coast, where the average cost for a gallon of diesel sits at $4.87.

Economists say that the cut in oil production is likely to make inflation worse.

Brent crude should reach $100 per barrel by December, says Jorge Leon, senior vice president at Rystad Energy. That is up from an earlier prediction of $89.

Part of the 2 million-barrel-per-day cut is only on paper as some OPEC+ countries aren’t able to produce their quota. So the group can deliver only about 1.2 million barrels a day in actual cuts.

That’s still going to have a “significant” effect on prices, Leon said.

“Higher oil prices will inevitably add to the inflation headache that global central banks are fighting, and higher oil prices will factor into the calculus of further increasing interest rates to cool down the economy,” he wrote in a note.

That would exacerbate an energy crisis in Europe largely tied to Russian cutbacks of natural gas supplies used for heating, electricity and in factories and would send gasoline prices up worldwide. As that fuels inflation, people have less money to spend on other things like food and rent.

Other factors also could affect oil prices, including the depth of any possible recession in the U.S. or Europe and the duration of China’s COVID-19 restrictions, which have sapped demand for fuel.

The Trucker News Staff

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.