The U.S. Energy Information Administration made a bold prediction at the outset of 2023, that passenger vehicle gasoline and truck diesel would decline in 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. 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 the Energy Administration.
According to the hard data, number 2 diesel closed out 2023 at $3.972 per gallon on average. In January 2022, prices hovered around $3.724 per gallon before hitting a high-water mark of $5.754 during June 2022 and $4.576 to open 2023. Although diesel prices at the pump have met the Energy Administration’s predictions, the cost is approximately double the $1.998 set in February 2016. If the federal agency is correct, truck diesel is only expected to dip to about $3.70 per gallon in the coming year.
Although diesel and passenger vehicle fuel costs typically follow similar changes, the two seem less in sync with each other. Diesel ran an erratic road, dipping to $3.802 in June 2023 before ticking up to $4.563 in September. Industry insiders such as GasBuddy seem hopeful that prices will decline and level off. However, the crisis in the oil-rich Middle East 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,” Patrick De Haan, head of petroleum analysis at GasBuddy, reportedly said. “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. once again set a record high for crude oil production at 13.3 million barrels per day. During the previous administration, record-high crude oil production resulted in the U.S. emerging as a net exporter. The term “energy independence” was routinely used in conjunction with low gasoline and diesel prices. If those metrics hold true, barring further energy disruption, truckers may very well get some much-needed relief in the coming months.
Sources:
https://www.eia.gov/todayinenergy/detail.php?id=55179
https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=emd_epd2d_pte_nus_dpg&f=m
https://www.gasbuddy.com/go/u-s-oil-production-reaches-new-record-high-refiners-churn-out-products
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