Two weeks ago the Energy Information Administration (EIA) said national average diesel prices were just 0.1 shy of tying the record high. Last week diesel prices did a 15.9-cent leapfrog over that old record to set the new bar at $2.567.
Gasoline prices last week rose a comparable 18.2 cents. New record-setting highs in crude oil prices coupled with scattered refinery outages during the peak summer season has resulted in the steep increases in on-highway fuel.
Truckers operating in all regions were given a price shock, but the West Coast and California regions, which had been slammed with skyrocketing fuel prices over the last four weeks, was spared the worst of the increases. West Coast and California prices rose “only” 9 and 9.9 cents, respectively to $2.891 and $3.042, EIA said. According to the Oil Price Information Service, today California diesel prices averaged $3.129, a boost over $3.003 last week on Aug. 9.
Michael Burdette, EIA senior analyst, told Fleet Owner that the West Coast swing in diesel is consistent with the increases in crude oil. Yesterday, for example, September crude oil futures rose to a new record high of $67.10 a barrel on the New York Mercantile Exchange. Crude oil ended last week 7.3% high, marking the biggest weekly price jump in nearly two-months, according to Dow Jones.
In addition to suffering the same crude oil price jump, the West Coast and California has been hit with an outage of a major California-based Chevron Corp. refinery that supplies the regions. According to EIA, since the refinery outage on July 20, weekly prices in California jumped 46.4 cents—over double the increase of the 22.5-cent rise nationally.
Although prices were expected to plateau with the recent refinery re-start, record high crude oil had propelled it forward instead.
The biggest boost was seen in the Midwest region as prices rose 18.8 cents to $2.524, EIA said. The Gulf Coast holds the claim for having the cheapest diesel prices, despite a 15.8-cent jump to $2.481.
“U.S. refineries have been running at full capacity,” said Burdette. “When there are outages, it tips that very delicate supply balance into the negative range. With refineries running at 96% to 97% capacity, when you lose a refinery, there’s no spare capacity to make it up. We don’t have the ability to ramp up production at another refinery anymore.”