By Jeff Berman, Group News Editor · March 17, 2020
The national average price per gallon for diesel gasoline dropped for the eighth consecutive week, according to data issued this week by the Department of Energy’s Energy Information Administration (EIA).
This week’s national average—at $2.753—decreased 8.1 cents compared to the week of March 9, which dropped 3.7 cents to $2.814. That was preceded by a 3.1-cent decline to $2.851 the week of March 2, which was preceded by a 0.008-cent decline to $2.882 the week of February 24 and the 4.6-cent decrease to $2.900 the week of February 17.
With this week’s decline, the national diesel average has now checked in under the $3 per gallon mark for the seventh straight week, going back to the week of February 3, at $2.956. Prior to the last seven weeks, diesel had not fallen below the $3 per gallon mark since the week of September 16, when it checked in at $2.987 and kicked off a 19-week stretch of $3 and above weekly averages.
On an annual basis, this week’s average is down 33.7 cents, topping the last two weeks, with annual spreads of 26.5 cents and 22.5 cents, respectively.
A recent USA Today article noted that gasoline could fall below $2 a gallon in the coming weeks, driven by oil prices that are plunging after major producers failed to agree to a plan to prop up crude prices this past weekend and by fears of declining energy demand due to economic disruption from the coronavirus.
On a Webcast hosted today San Francisco-based freight forwarding and customs brokerage services provider Flexport, Phil Levy, Flexport chief economist, explained that when the Coronavirus started to spread in China and Chinese factories started shutting down, a subsequent effect was the very sharp drop in energy prices, with oil prices dropping dramatically.
“That prompted OPEC to call for production restraint, and Russia refused to go along with that OPEC call, and, in response….there are now extraordinarily low energy prices,” said Levy.
West Texas Intermediate Crude oil is currently trading at $27.47 per barrel on the New York Mercantile Exchange, down sharply from the $33.68 and $48.22 averages over the previous two weeks, respectively.
March 17, 2020