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Fuel prices continue three weeks of relative calm

June 28, 2023
Changes in June haven’t been drastic at all—even in most regions of the country—but instead the U.S. diesel average has settled for the summer at around $3.80 while analysts wait for any impact on fuel and oil markets from the instability in Russia.

The U.S. average for diesel fuel fell 1.4 cents to $3.801 per gallon for the week of June 26, according to the newest government data, a week after rising almost as slightly, 2.1 cents, in the first increase for the average in more than two months.

Trucking’s main fuel has settled at around $3.80 per gallon during the last three weeks, barely deviating beyond 2 cents during that stretch, in a period of calmness that stands in stark contrast to last year’s wild ride of increases and the sharp declines of earlier this year, according to the U.S. Energy Information Administration (EIA). Motor club AAA also saw diesel on calm waters, down about a penny on June 27 to $3.877 from its average of one week ago.

Diesel is almost $2 per gallon cheaper—$1.982—than it was a year ago, but the price still is historically high. Prices did hover at similar levels in 2008 and at times from 2011 to 2014, according to EIA historical data, before falling again. They began ascending early last spring after the Russian invasion of Ukraine.

So far, the aborted revolt against Russian President Vladimir Putin's government last weekend hasn't roiled the oil markets like the Ukraine invasion did. Unlike then, when per-barrel crude prices rose as high as $120, West Texas Intermediate floated on June 27 at about $68 while Brent hung out around $73, one service reported, though there were slight upticks the last few days.

"After the weekend’s mutiny in Russia, oil markets were cautiously watching for further developments, worried over Russia’s oil production, which is one of the key drivers of the Russian economy and a potentially attractive target," according to a June 26 blog post by a third fuel market analyzer, GasBuddy. "While there are some broad concerns about the outlook for Russia moving forward, with Turkey and Switzerland raising interest rates last week, the market has fresh reminders of how oil demand will struggle as central banks raise rates to cool spending."

Diesel off just as slightly in all EIA regions

The fuel was down in every EIA reporting region, but nowhere more than 2.2 cents (along to Gulf Coast, to 3.51 per gallon, still by far the cheapest region). Diesel declined 1.7 cents along the West Coast, where it remained the most expensive in the country at $4.415 per gallon. The only other main EIA reporting region where the fuel was above $4 was in the Rocky Mountains, where it nevertheless dropped a penny to $4.022 per gallon. The fuel fell 1.3 cents to $3.853 along the East Coast, though two of its subregions, New England and the Central Atlantic, reported diesel above $4. The fuel was off half a penny in the Midwest to $3.734 per gallon.

In the June 26 post, GasBuddy noted the calmness in diesel prices, reporting that its most common U.S. price for the fuel stood at $3.69 per gallon, unchanged from last week, followed by $3.59, $3.79, $3.99, and $3.49 rounding out the top five most common prices nationwide.

At $3.69 per gallon, GasBuddy's median U.S. diesel price was down 6 cents from last week and about 15 cents lower than its national average for diesel. Diesel prices at the top 10% of stations in the country are averaging $4.87 per gallon, while the bottom 10% are averaging $3.23, it reported. The states with the lowest average prices for trucking's main fuel, it said, were Texas ($3.37), Louisiana ($3.41), and Oklahoma ($3.45). The states with the highest average diesel prices are Hawaii ($5.67), California ($4.95), and Washington ($4.91), according to GasBuddy.

Meanwhile, prices for gasoline, which is used widely by consumers and by some commercial fleets and work truckers, were a bit more volatile than diesel—but not by much. The U.S. average for gas is 23 cents cheaper than diesel, $1.301 per gallon less expensive than a year ago, but down the week of June 26 less than a penny from last week to $3.571 per gallon, according to EIA. Gas prices in the regions during the busy summer travel season, however, were a little all over the place this week (up 8.1 cents along the Gulf Coast but down 3.7 cents in the Midwest, for example) compared to diesel.

“While some states saw big increases from last week, I expect those states to see a calmer week ahead," said Patrick De Haan, GasBuddy's head of petroleum analysis. "Other states saw prices fall, and some like Arizona fell significantly as some of the kinks in supply have improved there over the last few weeks. Ultimately, we could see the national average nudge a bit lower in the week ahead, should oil prices fail to rally. But, with developments including the Wagner group destabilizing and testing Russia, there can always be last-minute shifts that impact prices, which we continue to watch for and hope the market remains calm.”

This story originally appeared on FleetOwner.com.

About the Author

Scott Achelpohl