WASHINGTON — U.S. retail diesel fuel prices set record highs for the fifth consecutive week although the rate of gain slowed considerably last week, the U.S. Energy Information Administration (E.I.A.) said.
The national average on-highway price of diesel fuel in the week ended March 24 was $3.989 a gallon, up 1½c from a week earlier and $1.313, or 49%, above the year-ago price of $2.676. But the weekly gain was small compared with gains that averaged nearly 14c a gallon each of the previous several weeks.
Diesel prices were the highest in the West and East, with an average of $4.056 on the West coast and $4.045 on the East coast. The lowest average was $3.928 on the Gulf coast. Prices averaged $3.964 in the Midwest and $3.953 in the Rocky Mountain region, the E.I.A. said.
The continued rise in U.S. diesel prices is mostly the result of globally strong demand and high prices for diesel and heating oil, said Brad Samples, commodity analyst with Summit Energy, Louisville, Ky.
"Europe, China and India are ‘exporting’ their high diesel markets to the U.S.," he said.
Meanwhile, distillate stocks, which include diesel fuel and heating oil, dropped for the seventh consecutive week. The E.I.A. reported distillate stocks on March 21 at 111.3 million barrels, down 2.2 million from a week earlier and the lowest since June 10, 2005.
"Reduced refinery utilization hurt diesel, but the pull-back was for gasoline," Mr. Samples said. U.S. refiners cut refinery utilization in an effort to reduce gasoline inventories and improve sagging profit margins, he said.
Refinery utilization of 82.2% of capacity for the week ended March 21 was the lowest since Hurricane Katrina and the lowest for the date since 1992, Mr. Samples noted. Capacity utilization was down 1.6 percentage points for the week, the E.I.A. data showed, while the trade had expected a half point increase.
The refinery cutback was reflected in E.I.A. data that showed a decrease in gasoline stocks for the second consecutive week after rising weekly for about 20 consecutive weeks previously. Nearby gasoline futures in New York jumped 9½c a gallon on the E.I.A. data, to a record $2.7752 on March 26, more than 3c above the previous record of $2.7435 set on March 11.
Retail gasoline prices averaged $3.259 across the U.S. as of March 24, down 2½c from a week earlier, the E.I.A. said.
Crude oil futures prices in New York were off their highs set a couple of weeks ago but turned higher after the E.I.A. stocks data was released last week. At midweek nearby crude oil futures prices rose about $5, to around $106 a barrel.
But the slowing economy and reduced demand for heating oil as weather warms in the Northern Hemisphere in April should allow diesel prices to moderate, Mr. Samples said.
"Diesel demand is slowing because of the weak economy," Mr. Samples said. "There is a clear sign of declining trend growth for diesel."
The U.S. diesel price compiled by the Department of Energy’s E.I.A. is an average of on-highway prices in five regions and three sub-regions.
This article can also be found in the digital edition of Food Business News, April 1, 2008, starting on Page 25. Click