At the start of 2023, the U.S. Energy Information Administration (EIA) came out with a bold prediction, forecasting a decline in passenger vehicle gasoline and truck diesel prices throughout 2023 and into 2024.
“Additional refinery capacity that came online in late 2022, combined with additional capacity expansions expected to come online in 2023, will also contribute to rising supplies of both gasoline and diesel fuel internationally, further contributing to lower prices globally in 2023 and 2024,” according to the EIA). “We also estimate that U.S. refiners will continue to produce gasoline, even as prices decrease, to meet higher global demand for diesel fuel.”.
According to concrete data, number 2 diesel concluded 2023 with an average price of $3.972 per gallon. In January 2022, prices hovered around $3.724 per gallon, reaching a peak of $5.754 in June 2022 and starting 2023 at $4.576.
While diesel prices at the pump align with the EIA’s projections, the cost remains nearly double the $1.998 recorded in February 2016. If the federal agency’s forecast holds, truck diesel is anticipated to slightly decrease to approximately $3.70 per gallon in 2024.
Despite the usual correlation between diesel and passenger vehicle fuel costs, the two appear somewhat out of sync. Diesel experienced fluctuations, dropping to $3.802 in June 2023 before rising to $4.563 in September. Industry observers, including GasBuddy, express optimism that prices will decrease and stabilize.
However, the ongoing crisis in the oil-rich Middle East introduces an element of uncertainty that could impact truck transportation costs.
“After 13 straight weeks of decline, average gasoline prices have edged higher due to optimistic comments from the Fed on cutting interest rates in 2024, coupled with Houthi attacks on vessels in the Red Sea, boosting concerns of a disruption to global shipping, including oil shipments,” said Patrick De Haan, head of petroleum analysis at GasBuddy. “For now, the price of gasoline has already jumped but could ease slightly this week ahead of the New Year. For now, I’m optimistic that we may still have a chance of seeing the first $2.99 national average since 2021 sometime before spring arrives.”
The U.S. achieved another record high for crude oil production at 13.3 million barrels per day. In the prior administration, such production records led to the nation becoming a net exporter, often associated with the concept of “energy independence” and low gasoline and diesel prices. If these metrics persist, barring further energy disruptions, truckers may experience some relief in the months ahead.
Source: TruckersReport
