Fuel, Oil Prices Continue Falling
October 27, 2008
Diesel and crude oil prices continue to plummet from their summer record highs. The national average price of a gallon of diesel as of Oct. 27 was $3.288, down 19.4 cents from the previous week
and only 13.1 cents higher than it was a year ago.
The lowest average price was reported in the Gulf Coast region at $3.219; the highest in the New England region at $3.573. The Gulf Coast price also was the biggest drop, falling 23.4 cents from the previous week. West Coast prices are actually 16 cents lower now than they were a year ago, with a $3.233 average.
Perhaps reflecting the lower prices despite slowing freight demand, the truckstop organization NATSO reports that diesel volumes at truckstops increased 3.17 percent in September over 2007 volumes. The average diesel volume for a single truckstop location was 830,480 gallons in September, compared with last year's average volume of 804,972 for the same month. The September results marked the first year-over-year increase in diesel sales volumes since April and followed a sharp 7.8 percent decline in August.
Diesel volumes experienced a strong start at the beginning of 2008, but increases did not continue through the spring and summer months. In January and February, truckstop diesel volumes increased at a rate of close to 6 percent year over year. However, as diesel prices rose, volumes began to decline, and by March sales had dropped by 2.5 percent over the previous year. Diesel sales slightly recovered in April, increasing just over 2 percent, but then dropped sharply in May, falling 5.8 percent compared with May 2007. June diesel sales declined 5.2 percent compared with June 2007, and July sales dropped 4.5 percent year over year.
Meanwhile, crude oil futures fell 93 cents to settle $63.22 a barrel in trading on the New York Mercantile Exchange Monday, reports the Associated Press, after dropping to their lowest point since May 2007. At the low of $61.30, crude prices were down 58.4 percent from the July record of $147.27.
The trading market all but ignored OPEC's announcement Friday that it will cut production by 1.5 million barrels per day in an effort to shore up crude oil prices. According to published reports, Iran's OPEC governor says the cartel will cut production further if prices keep falling.