Diesel prices continue to rise   

Weekly retail on-highway U.S. diesel prices continued to climb, rising to $3.573 per gallon, a 3.9 cent increase over the prior week. Diesel prices have risen 77% since bottoming out at $2.023 on March 16, 2009. More recently, diesel is up 21% since late September, when the price was $2.951 per gallon. A view of weekly prices over the last 3 years is ominous, as 2011 is starting off with much higher prices than seen in 2009 or 2010 (second graph). With the economy showing glimmers of hope and the Fed intent on a weak dollar to support exports, a return to 2008 diesel fuel prices is certainly not out of the question. Prices are at the highest level since October 2008, when prices were rapidly falling. Diesel prices peaked at $4.764 per gallon in July of 2008 and were above $3 per gallon from September 24, 2007 to November 3, 2008.