Ranman
09-27-2006, 02:52 PM
the bottom fell out of the gasoline market and sweet oil is trading below $60/bbl, but...
Diesel fuel is setting new records
Purchasing
October 10, 2005
Many business deliveries are made by trucks powered by diesel fuel, which closed last week by setting a record at the pump of $3.20 a gallon. At this time last year, diesel prices were at $2.09 but many Gulf Coast refineries this year still are closed in the aftermath of hurricanes Katrina and Rita. Analysts say $4 diesel is possible.
As of last week, 10 gasoline and diesel refineries accounting for 14% of U.S. capacity remained closed due to the hurricanes, the Reuters News Service reported, and 80% of offshore Gulf of Mexico production remained shut. Diesel prices greatly influence everyday life and arguably impact business and living costs even more than gasoline prices. Trucks carry 70% of all freight in the country, and 80% of all communities get their goods solely by truck, according to the American Trucking Associations. The trucking industry is on pace to spend an unprecedented $85 billion on fuel this year-a $23 billion increase over last year. For most motor carriers, fuel already represents 25% of operating costs and is the second-highest expense after labor. "Diesel prices will raise the price of everything that is shipped and are already having an influence," says economist James Williams at WTRG Economics in London, Ark. He says $4 diesel is a possibility. Tom Kloza, chief oil analyst at the Oil Price Information Service in Rockville, Md., agrees. "There is a crisis," he says on company website OPISnet.com, "evident at truck stops and other places that pump diesel fuel across the Southeast, Midwest and Gulf Coast states. Expect to hear loud screams soon from trucking companies, railroads and anyone else that buys diesel fuel across the country."
Randy's note - relief not foreseen as we go into home heating oil season, which draws from the same, already-tight supply stream as does #2 diesel, kerosene and jet fuel.
Diesel fuel is setting new records
Purchasing
October 10, 2005
Many business deliveries are made by trucks powered by diesel fuel, which closed last week by setting a record at the pump of $3.20 a gallon. At this time last year, diesel prices were at $2.09 but many Gulf Coast refineries this year still are closed in the aftermath of hurricanes Katrina and Rita. Analysts say $4 diesel is possible.
As of last week, 10 gasoline and diesel refineries accounting for 14% of U.S. capacity remained closed due to the hurricanes, the Reuters News Service reported, and 80% of offshore Gulf of Mexico production remained shut. Diesel prices greatly influence everyday life and arguably impact business and living costs even more than gasoline prices. Trucks carry 70% of all freight in the country, and 80% of all communities get their goods solely by truck, according to the American Trucking Associations. The trucking industry is on pace to spend an unprecedented $85 billion on fuel this year-a $23 billion increase over last year. For most motor carriers, fuel already represents 25% of operating costs and is the second-highest expense after labor. "Diesel prices will raise the price of everything that is shipped and are already having an influence," says economist James Williams at WTRG Economics in London, Ark. He says $4 diesel is a possibility. Tom Kloza, chief oil analyst at the Oil Price Information Service in Rockville, Md., agrees. "There is a crisis," he says on company website OPISnet.com, "evident at truck stops and other places that pump diesel fuel across the Southeast, Midwest and Gulf Coast states. Expect to hear loud screams soon from trucking companies, railroads and anyone else that buys diesel fuel across the country."
Randy's note - relief not foreseen as we go into home heating oil season, which draws from the same, already-tight supply stream as does #2 diesel, kerosene and jet fuel.