Diesel Declines, Oil Stalls on S&P Warning about European Credit Ratings
December 05, 2011
National average diesel prices dipped 3.3 cents over the past week, according to the Department of Energy. It's weekly price survey for the week of Dec. 5 shows diesel sitting at $3.931 per gallon.
This week's dip was the second consecutive decline for diesel fuel, following last week's 4.6-cent drop reported by DOE. Diesel is now 4.4 cents a gallon higher than it was a month ago, and 73.4 cents dearer that it was this week a year ago.
The DOE says the national average price for gasoline is now at $3.29 a gallon, nearly two cents a gallon less than it was a week ago.
Meanwhile, benchmark crude oil dropped $2 per barrel in afternoon trading on Monday after rising as high as $102.44. The benchmark price ended the day about where it began, at $100.99 per barrel, up just 3 cents.
Oil prices gave up gains made earlier in the day on news that Standard & Poors could downgrade credit ratings for the wealthiest nations in Europe.
The Financial Times reported that S&P will put Germany, France, the Netherlands, Austria, Finland, and Luxembourg on notice that it is reviewing their credit worthiness. Each has a one-in-two chance of a downgrade in the next 90 days, the newspaper said.Exports Restricting Domestic Supplies
While the U.S. labors under stubbornly high unemployment and sluggish growth, emerging-market economies are growing strongly, sucking up fuel by the shipload.
U.S. customers have been pulling back in part because an anemic economic recovery has left millions still looking for work. In August, U.S. drivers burned 7.7% less gasoline than four years earlier, when gasoline usage peaked.
Now, "we're not using as much," said James Beck, an analyst at the EIA. "Prior to 2008, basically anything we produced, we used."
But U.S. drivers aren't seeing much benefit in the form of lower prices because refineries on the Gulf Coast are shipping much of their output to places where demand is strong, keeping prices high.
According to data released by the U.S. Energy Information Administration last week, the U.S. exported 753.4 million barrels of everything from gasoline to jet fuel in the first nine months of this year, while it imported 689.4 million barrels.
U.S. exports of gasoline, diesel and other oil-based fuels are soaring, putting the nation on track to be a net exporter of petroleum products in 2011 for the first time since 1949, when the U.S. economy was ramping up rapidly after World War II.On-Highway Diesel Prices by Region(Self Service Cash Price in Dollars per Gallon, Including Taxes)
East Coast: 3.934
New England: 4.036
Central Atlantic: 4.018
Lower Atlantic: 3.862
Gulf Coast: 3.828
Rocky Mountain: 4.035
West Coast: 4.105
The national average price in Canada for the week of Nov. 29 - Dec. 5, as reported by MJ Ervin & Associates, was 132.5 per liter ($4.996/USgal), down 1.6 cents per liter from the previous week. Whitehorse, Yukon had the highest price at 146.4 per liter ($5.541 US), while Calgary, Alta. Posted the lowest price in the land at 122.9 ($4.651 US).