DOE says Diesel Fuel Prices Will Stay over $4.00 for the Rest of The Year

Diesel fuel prices will average $4.21 a gallon this summer and $3.94 a gallon this year, while holding over $4 into 2013, the Department of Energy said Tuesday.

The monthly average for diesel fuel prices — which pushed past $4 in March — will peak at $4.25 in August before receding gradually to $4.18 in December according to the DOE. Of course what the DOE believes or anyone else is an educated guess at best. We believe the refinery situation in the Mid Atlantic states could make for interesting diesel fuel prices for the rest of the year, if those refineries are shut down.

In the trucking diesel fuel will hold over $4 next year but fade to an average $4.11 per gallon, DOE said in its monthly short-term energy outlook.

Gasoline will average $3.95 during this year’s April-September summer driving season and $3.81 for the full year, before slipping to an average $3.73 in 2013, the report said. We believe that gas will actually come back down lower if all things remain equal. I don’t think $3.50 a gallon by the fall would be crazy.

The prices in the monthly report often lag DOE’s weekly price surveys. On Monday, it reported diesel fuel prices averaged $4.148 a gallon and gas prices averaged $3.939. Diesel fuel prices have slowed down in their raise in recent weeks. Crude oil has also back down of its highs last month.

Diesel fuel is currently 30 cents higher than it was this time last year and $1.13 per gallon more than it was in 2010. Sorry for the depressing news.

DOE boosted its 2012 projection for crude oil by a penny from last month’s outlook, to $105.72 a barrel, and said oil will average slightly higher than that next year, at $105.75. The game changer to this fuel pricing is Iran. Some feel that there is a $10-$20 a barrel premium built into the price of crude, called a war premium. If things can settle down some over there, we all could see a big dip. Of course if things really heat up, well we really don’t want to talk about that.

Crude futures fell $1.44 on Tuesday to finish the New York Mercantile Exchange trading day at an eight-week low $101.02 per barrel, Bloomberg reported.

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