The average price of diesel fuel continued to fall last week amidst reports that global crude oil production would not be cut to meet lower demand, according to the latest numbers from the Energy Department.
The price of a gallon of on-highway diesel fuel fell 4-cents last week settling to an average price of $2.031. Fuel prices have been in free fall for more than a year now and a gallon of diesel is 80 cents cheaper than it was the same week a year ago.
Prices were down across the country, falling by as much as 5.2 cents on the West Coast. The smallest weekly decrease was recorded in New England, where average prices at the pump decreased by 2.1 cents.
The price of a gallon of regular gasoline fell by a similar margin last week, dropping 3.4 cents and settling at $1.822. Compared to the same week a year ago, prices are 24.6 cents cheaper.
The largest decrease by region was on the West Coast where prices fell by 8.4 cents. The West Coast averages the highest gas prices in the country so despite the significant decrease, the price is actually 4.7 cents more expensive than in the same period of 2015. The smallest drop in prices was in the Midwest where gasoline fell by only 0.8 cents for the week.
Crude oil prices made gains last week after falling below $30 a barrel at one point but fell again on Monday after Iran announced that it wanted to increase its global exports, according to a Wall Street Journal report. The country expressed its desire to increase exports by 1.5 million barrels per day, up from the current rate of 1.1 million.
With shrinking global demand and weakness in key markets like China, oil production output has outpaced demand for much of the past year, causing energy prices to fall. Iran’s recent re-entry into the global oil economy due to lifting U.S. sanctions has only added to the production glut so far.