Roger W. Gilroy |
The U.S. average retail price of diesel rose 0.9 cent to $2.481, while oil prices failed to reclaim ground after a sharp drop a week earlier.
It marked diesel’s second increase after four consecutive weekly declines.
Diesel costs 6.7 cents more than it did a year ago, when the price was $2.414 a gallon, the Department of Energy said July 10.
Regional prices for trucking’s main fuel rose in seven markets, were unchanged in two and declined by 0.1 cent in the Rocky Mountains.
West Texas Intermediate crude futures on the New York Mercantile Exchange closed at $44.40 per barrel July 10, compared with $47.07 on July 3.
“Excess supply is still what’s controlling market prices,” Rob Haworth, senior investment strategist at U.S. Bank Wealth Management, told Bloomberg News. The Seattle firm oversees $142 billion of assets.
“I suspect that oil prices will remain weak through the end of the calendar year,” Jeffrey Born, professor of finance at Northeastern University told Transport Topics. “What I mean by that is that I don’t see them rising and sticking above $50 for very long.”
The good news for trucking, he said, is that energy prices are likely to remain low “and are far more likely to go lower than go significantly higher.”
The OPEC cartel is unstable, Born said, and cheating on production quotas among its members occurs while are many nonmembers, including Russia and now the United States, “march to their own drummers,” he said.
Another wild card was the recent royal shuffle in Saudi Arabia that saw Mohammed bin Salman oust former crown prince Mohammed bin Naye, he said.
“There is always the possibility of a price war amongst the big oil producers,” Born said. “The Saudis previously signaled that they were not going to continue this strategy in an effort to drive U.S. shale gas producers out of business. This is where the political shake-up comes into play. The sacking of the crown prince might be a signal that Saudi policy is about to change.”
The weekly U.S. rig count also rose to 952 during the week of July 7, 12 more than the week before and 512 more than a year earlier, oil field services company Baker Hughes Inc. reported.
Houston-based Baker Hughes ranks No. 14 on the Transport Topics Top 100 list of the largest private carriers in North America.