Diesel prices set record high for third consecutive week

by Ron Sterk
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WASHINGTON — U.S. retail diesel fuel prices set record highs for the third consecutive week, with the nation’s average at $3.819 a gallon as of March 10, according to the U.S. Energy Information Administration (E.I.A.).

The national average on-highway price of diesel fuel was up 16.1c from the prior week’s record of $3.658 a gallon, and up 26.7c from $3.552 a gallon two weeks earlier. Until the latest three-week string, the previous record high was $3.444 set Nov. 30, 2007. The post-Hurricane Katrina high of $3.157 was set Oct. 28, 2005, according to E.I.A. data. The latest price was $1.134, or 42%, above the year-ago average of $2.685 a gallon.

Crude oil futures prices in New York also set record highs last week, with the April contract hitting $111 a barrel on March 13.

In its Short-Term Energy Outlook issued March 11, the E.I.A. said, "The projected higher costs for crude oil in 2008 are likely to be passed on to all petroleum products." West Texas intermediate crude oil prices are forecast to average $94.11 a barrel in 2008 and $85.92 in 2009, compared with $72.32 in 2007, the E.I.A. said in its Outlook.

The E.I.A. forecast 2008 retail gasoline prices to average $3.21 a gallon, 40c above 2007, with a monthly peak near $3.50 in the spring. But the E.I.A. added, "There is a significant possibility that prices during some shorter time period, or in some region or sub-region, will cross the $4 per gallon threshold." Ironically, U.S. gasoline stocks as of March 7 had risen for the 18th consecutive week and at 236 million barrels were the largest since March 12, 1993, the E.I.A. said.

Distillate stocks, which include diesel fuel and heating oil, declined to 116.4 million barrels in the latest week, the E.I.A. said, although stocks were near the five-year average. U.S. monthly average diesel prices were forecast to average near $3.70 a gallon in March and April and $3.45 for all of 2008, or 57c above the 2007 average price. The 2009 average diesel price was projected at $3.06 a gallon.

"The slowing economy combined with high petroleum prices is expected to constrain growth in U.S. consumption of liquid fuels and other petroleum products in 2008," the E.I.A. said.

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. The highest average price as of March 10 was in the New England sub-region at $3.989 a gallon, and the lowest average was in the Rocky Mountain region at $3.732.

This article can also be found in the digital edition of Food Business News, March 18, 2008, starting on Page 21. Click here to search that archive.

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