Fuel Smarts

Diesel Prices Up, Oil Production Could Increase

April 25, 2016

Source: EIA
Source: EIA

The price of diesel fuel increased for the third week in a row, hitting an average price of $2.198 per gallon, according to the latest numbers from the Energy Department released Monday.

The average price of on-highway diesel fuel increased 3.3 cents last week. Diesel prices have been steadily increasing since early this year, but the average is still 61.3 cents cheaper than it was in the same week a year ago.

The largest increase in prices last week was in the Midwest at 4.4 cents. The smallest change in prices by region was in New England with a 0.4-cent increase for the week.

The average price of regular gasoline also increased last week with a 2.5-cent increase to $2.162 per gallon. The price is 40.8 cents cheaper per gallon than it was 12 months ago.

Despite oil-producing countries not being able to come to an agreement on oil production, crude oil prices surged last week, finally losing some value on Monday, according to a MarketWatch report.

Analysts expected crude oil to drop as production remains too high for global demand. Despite a rally last week, the reality that production will not be dropping any time soon (and in some cases may be increasing) finally caused the price of a barrel of oil to drop.  Kuwait was in the midst of an oil worker strike last week, but the strike ended and oil production ramped up to as much as 3 million barrels per day, with further increases possible.

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