Diesel Drops Again

Information from the Energy Information Administration published on November 6th shows that, after a slight increase in the middle of October, diesel fuel has decreased in price during the two weeks following that price bump, to lower than what it was before.

Details

The national average for diesel fuel increased 10.1 cents per gallon the week of October 23rd. In the next two weeks, it dropped 17.9 cents. Across the board, even in California where diesel fuel is most expensive, prices are down at a minimum of 3/8ths of a dollar (37.5 cents) per gallon compared to the same time last year.

There are a multitude of culprits working in tandem to bring the price down, including Russia resuming diesel exports to other countries worldwide, but the primary force behind it all is simply reduced demand. When diesel prices are as high as they are for as long as they have been, trucking businesses start making long-term adjustments to compensate. They start moving their garages closer to the typical routes the fleet take, or, when it is time to get a new truck, opt for one that is more diesel efficient or ditch the fossil fuel altogether.

Conclusion

It is hard to say if diesel will continue to decrease in price for the foreseeable future. After all, it was July of this year where the energy source seemed like it was going to slowly but surely drop back down to Trump-era prices, before shooting back up again. All we can know for sure is that the market will try to reach its equilibrium as more people are willing to buy diesel fuel when it is cheaper.

Furthermore, depending on which party wins the presidency 2024, diesel prices are likely to go in just about any direction, given the national energy policy. It is very possible that diesel fuel may be going the way of the dodo bird as new technologies not only emerge but are supported by regulation and legislation. We will have to wait and see what happens in the years to come.

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