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Sunday, April 11, 2021

Report: Diesel Prices Set to Flare Up

Diesel prices are poised to soar “much, much higher” in just over a month from now, Tom Kloza, a senior oil analyst for Oil Price Information Service (OPIS).

While gas prices are expected to fall in November, diesel could be as much as $50 per barrel above crude or around $4.00 per gallon wholesale beginning around Q4 of 2012 and Q1 of 2013, Kloza said in a live webcast on the future of North American fuel prices, presented by Fleet Owner magazine.

“Diesel is where I am really worried,” Kloza said. “Retail prices could get close to the 2008 crazy period when they reached $4.75 or higher.

He said there may a short price break from about Labor Day to Columbus Day, but expects prices to begin climbing rapidly after that. “ [I am seeing] just about as compelling a case for a run-up in diesel prices as I have ever seen.”

He offered several reason why, including:

“The demand that is growing is for diesel, not gasoline. Diesel has more BTUs, more energy. Diesel is the molecule every refiner in the world wants to focus on,” he said, “including here in North America.”

There are some other factors that could offset  a rise in diesel prices, such as another global recession. “Diesel is the international bellwether product,” he said. “As the economy goes, so too do global diesel price references.”

Regardless, Kloza said he’s  plenty optimistic had plenty about the energy future for North America. “I am here to tell you today that North America has become a much larger producer of oil than before. There has been nothing less than a revolution in oil production over the last two years or so.”

Kloza’s full webcast, “Managing fuel prices in a volatile market,” can be seen here, free of charge.