Mar 10, 2021
Retail diesel prices across the U.S. have skyrocketed since the beginning of February, rising 40.5 cents a gallon since the week ending Feb. 8, according to the Department of Energy’s Energy Information Administration’s (EIA) weekly pricing updates. Fuel prices have also increased for 18 consecutive weeks, rising 77 cents since the beginning of November.
As of the week ending March 8, the national average for a gallon of on-highway diesel was $3.143, the highest national average in nearly two years. The last time fuel prices were at this level was the week ending May 27, 2019, when fuel was $3.151 per gallon.
The Department of Energy credits a few different reasons for the drastic jump in the last five weeks: rising crude oil prices, strong demand for distillates, and the mid-February winter storms that shut down refineries in Texas.
The sustained OPEC+ production curtailment through April suggests that supply will remain constrained in the near term, even as demand continues to increase. As a result, the U.S. Energy Information Administration expects that further inventory withdrawals to meet rising crude oil demand will support crude oil prices through at least the end of April.
Oil prices rose on Wednesday on an upbeat forecast for global economic recovery and as U.S. gasoline inventories plummeted, but prices were limited due to a surge in crude oil inventories in the aftermath of last month's Texas winter storm.
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