Diesel Prices Increase After 9-Week Streak

What’s New?

On Aug. 29, the EIA reported diesel fuel increased by 20.6 cents, ending the nine-week long streak of decline in fuel costs. This increase puts the national average over $5 per gallon.

From June 27, after reaching a record high of $5.810, to Aug. 8, diesel prices declined about 10 cents per week, totaling a decline of 90.1 cents over the nine weeks.

By this time last year, diesel fuel was $1.776 less than it is now.

Of the 10 regions surveyed by EIA, increases range from 28.2 cents in the midwest, to 2.5 cents in the Central Atlantic. 

Diesel costs for California are the only place of the 10 that have an average higher than $6 per gallon.

Lower Atlantic, Gulf Coast, and the Rocky Mountains average out at about $5 per gallon.

Diesel Gas 2023 Predictions

EIA forecasts global liquid fuel consumption to grow by 2.2 million barrels per day in 2022 and 2.0 million barrels per day in 2023.

US crude oil production is an average of 11.9 million b/d in 2022 and 12.7 million b/d in 2023, which would set a record for most U.S. crude oil production in a year. The current record is 12.3 million b/d, established in 2019.

The U.S. retail price for regular grade gasoline averaged $4.56 per gallon (gal) in July, and the average retail diesel price was $5.49/gal. We expect retail gasoline prices to average $4.29/gal in the third quarter of 2022 (3Q22) and fall to an average of $3.78/gal in 4Q22. Retail diesel prices in our forecast average $5.02/gal in 3Q22 and $4.39/gal in 4Q22.

Diesel Gas August Predictions

According to EIA, based on their Short-Term Energy Outlook April 12 update, EIA is predicting retail diesel fuel will average $4.57 per gallon.

They further calculate the average U.S. household will spend about $2,945 on gasoline in 2022, which is $455 (18%) more than in 2021. 

Conclusion

While diesel fuel has gone up, increased truck driver wages will hopefully combat these costs by boosting the economy. Hopefully, we will see this reflected in gasoline and diesel fuel prices.

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