US diesel climbs for ninth straight week to $4.633 a gallon
The national average diesel price rose 9.3 cents in mid-September 2023 and was up nearly 83 cents in nine weeks, federal data showed.
In September 2023, the U.S. average price of diesel rose 9.3 cents in a week to $4.633 a gallon, according to Energy Information Administration data released Sept. 18.
The on-highway average had climbed 82.7 cents a gallon over nine straight weekly gains. The last decline had been 3.9 cents, on July 10.
Narrowing the gap with 2022
Diesel was still 33.1 cents cheaper than at the same time in 2022. But that discount had narrowed sharply. At the end of the first half of 2023, diesel had cost more than $1.90 a gallon less than a year earlier.
Prices rose in all 10 regions in EIA's weekly survey. California posted the largest gain, 22.2 cents, pushing its average back above $6 a gallon. The smallest increase was 3.9 cents in the Lower Atlantic region. Regular gasoline rose 5.6 cents to $3.878.
What was driving prices
Analysts pointed to demand from harvest season in the Midwest and peak shipping season, along with refinery maintenance. Harvest was well under way but a couple of weeks from its peak, said Patrick de Haan, head of petroleum analysis at GasBuddy. Irving Oil's 320,000-barrel-a-day refinery in Saint John, New Brunswick, which ships much of its diesel to New York, was scheduled to shut down Sept. 17 for several weeks.
Wholesale fuel and crude prices were also elevated. West Texas Intermediate crude futures topped $90 a barrel Sept. 18 for the first time since November 2022, largely because of production cuts by Saudi Arabia and its OPEC+ partners that reduced supply of the heavier crudes that yield more diesel.
Wood Mackenzie principal analyst Austin Lin said U.S. refining capacity had fallen by more than 1 million barrels a day in recent years, leaving all fuel markets tight. He said the U.S. was producing about 5 million barrels of diesel a day, about 200,000 fewer than a year earlier.
Analysts said a national average of $4.75 was likely in the short term, with $5 possible in winter.
What it meant for carriers
The increase arrived during a weak freight market. FTR Transportation Intelligence's Avery Vise said 55,000 carriers, mostly small ones, had exited in the first seven months of 2023. Stifel's Bruce Chan said higher fuel prices were likely to push more trucking companies out of the business, and Vise said smaller carriers were especially vulnerable.