The national average diesel fuel prices kept falling during the week ended Dec. 17, dropping 4.6 cents to $3.945 a gallon, according to the U.S. Department of Energy’s Energy Information Administration. The latest weekly diesel fuel price is 11.7 cents above the same week last year. When you think of all the ups and downs the price of diesel fuel has had, that is pretty nuts that we are almost back to same time as last year.
What is hedging? It’s a financial instrument to buy something in the future at a given price. In this case, we are talking about diesel fuel prices. Why would you want to purchase fuel today for the future? As this article is written, diesel fuel prices have been all over the map the last 6 months. Maybe some companies want a little predictability. Could they get lower? Sure. Could fuel prices go higher? Bet on it!
That would be a big question when it comes to your fleet fueling budget for next year. At this point it is very difficult to say what is going to happen with diesel fuel prices or anything else in 2012. We do know that 2012 is an election year, which usually means the political side that has the power, doesn’t want to screw up. The side that doesn’t have the power wants to do a few things different to get the power.
The U.S. banks are going to go through another round of stress tests. Didn’t we learn anything from a couple of years ago? Who oversees these banks?
The economy is flat, no job growth at all but we have the new Obama jobs creation package out there. It will be difficult to pass but I think some kind of compromise is likely. No political party wants to be going through an election year with no job growth.
Europe is pushing to tackle its debt crisis issues. With Germany willing at this point to step in and help with the Greece bailout, this would provide the euro zone countries stability.
Libyan oil has not been on the market for almost 6 months and as the revolution is coming to a head, it is doubtful that any oil will come out of this market many months. Even with weak economies in U.S. and Europe fuel supply is fairly tight. Going into the winter months when demand is heavier in these countries and areas like the Middle East, China and Latin America are emerging, we could have prices higher than last year. The DOE is projecting $101 a barrel for crude oil and $3.96 for diesel. Let’s wait and see on that.
If you need any kind of fuel help, whether it be choosing a fuel card, negotiating prices, auditing fuel invoices or fuel team to improve your fuel spend call Sokolis Group 267-482-6159 or email Conor Proud at email@example.com.
Diesel fuel prices national average rose for a second week, up 4.8 cents to $3.868 a gallon, while gas prices gained 4.7 cents to $3.674, the Department of Energy said Tuesday.