Diesel Continues Price Slide
In recent times the price of oil has been dropping, to the point where the Biden Administration is purchasing the black gold in order to refill the Strategic Petroleum Reserve, and with it the price of diesel is dropping.
Details
In the last four weeks since July 8th, the price of diesel has dropped eleven cents per gallon, according to the Energy Information Administration. Also interesting is that it is about 48 cents lower than it was the same time in 2023.
As per usual, there are numerous economic factors in play that are causing this phenomenon. Perhaps most notably is the United States’ own role in the market: the United States is gathering more barrels of oil than any other country in the world, well over 12 million barrels per day, or approximately 3.3 million barrels of diesel fuel daily, though that may change in the coming years.
As we wrote in the previous article cited, the federal government is once again in a strong position to continue buying more oil to refill the Strategic Petroleum Reserve and make a profit off the buying (relatively) low and selling high.
Conclusion
As alternative fuels attempt to break into the trucking market, whether it is biodiesels, electricity, or hydrogen fuel, the decrease in price for the tried-and-true fuel for the trucking industry means that fleets have less of a motivation to make a switch, especially as internal combustion engines become more and more efficient over time.
The likely case for the future of the United States’ oil market is that, should Kamala Harris win the 2024 election campaign, there will be additional motivators to help the transition to greener energies such as regulations and requirements, whereas the Republicans are adopting a motto of “drill, baby, drill”, which will cause the prices of diesel, gasoline, and other petroleum products to continue dropping. We will have to see in November as to what happens.
While TopMark Funding currently does not offer financing on alternative fuel trucks, anything is possible in the coming years. Just as the price of oil goes up and down, the future is not yet written.
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