That's 4.6 cents higher than a week earlier and 56 cents higher than a year ago. The last time prices were this high was in the fall of 2008, when prices were coming down off of the record near $5-per-gallon highs of that summer.
The rise in prices is being driven by higher prices for crude oil, which has stayed above the $90 mark since Wednesday, and settled at $91 per barrel on the New York Mercantile Exchange after a 51-cent drop from Friday. Analysts blamed the drop on China's decision over the weekend to raise its benchmark lending rate. Higher interest rates will not only cool off China's economy, they'll also cut the country's appetite for energy.
Investment banks including J.P. Morgan and Morgan Stanley are predicting a return to $100-per-barrel oil in 2011. Prices might be down this week, but "the market is really getting limber for a sprint come January," said Tom Kloza, publisher and chief oil analyst at Oil Price Information Service.
World oil demand is still expected to increase next year, and OPEC ministers signaled over the weekend that they would not be raising output quotas. Many expected OPEC to increase production to ease price increases, but Arab OPEC members said at a meeting in Cairo over the weekend that they wouldn't even meet until June.
That left diesel fuel on a steady toward the $3.30 mark. Average prices around the country, according to the DOE's Energy Information Administration, range from a high of $3.428 in the central Atlantic region to a low of $3.226 along the Gulf coast. California posted the highest prices in the land at $3.470 cents a gallon.
DOE Weekly Retail On-Highway Diesel Prices
East Coast $3.313
New England $3.406
Central Atlantic $3.428
Lower Atlantic $3.256
Gulf Coast $3.226
Rocky Mountain $3.311
West Coast $3.405