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Diesel Prices Drop Slightly

June 2, 2008

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Diesel prices dropped slightly over the past week after a meteoric run-up that saw the national average of a gallon of diesel rise more than 57 cents in just three weeks.


After going from $4.149 the week of May 5 to $4.723 the week of May 26, the average retail price of a gallon of diesel dropped last week to $4.707, according to figures released Monday by the U.S. Energy Information Administration. That's down 1.6 cents from the previous week but is still $1.908 higher than it was a year ago.

Prices were down in every region except the Rocky Mountain region, which was up 2.7 cents from last week to $4.68. The highest average price was reported in the Central Atlantic region at $4.907. The lowest was in the Midwest at $4.643. California prices, which are reported separately from the regional numbers, remained unchanged from last week at $5.027.

Crude oil prices rose Monday but were still down from recent record-setting $130-plus levels.

Meanwhile, national and international experts talked about global oil demand and prices at the Reuters Global Energy Summit on Monday.

The International Energy Agency told reporters it would lower its forecast for world oil demand. Reuters reports that the agency predicts world oil demand will rise by 1.3 million barrels per day in 2008 - less than half of what it predicted in July 2007. The cut in predicted demand is due to record oil prices slowing demand.

However, Guy Caruso, head of the U.S. Energy Information Administration, predicted at the Reuters summit that oil prices should stay above $100 a barrel through 2009 and potentially longer as supply strains to keep up with demand. He also noted that damage to coal-fired power plants caused by the massive earthquake in China last month, as well as the Olympics, could boost oil demand in China, at least temporarily.

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