Diesel prices inch downward for 5th straight week   

Weekly retail on-highway U.S. diesel prices decreased by 2.8 cents to $3.721 per gallon. This is the lowest weekly diesel price since February 28. While diesel prices have dropped from the $4.124 peak in May, they remain 21% above the level from one year ago. The recent low price point for diesel was $2.023 on March 16, 2009. A view of weekly prices over the last 3 years shows much higher prices than seen in 2009 or 2010 (second graph). Diesel prices peaked at $4.771 per gallon in July of 2008 and were above $3 per gallon from September 24, 2007 to November 3, 2008 (over 13 months). Prices have been back over $3 since October 4, 2010 (12 months). In 2008, diesel exceeded $4 per gallon for 23 straight weeks, compared with 6 straight weeks earlier in 2011. Some forecasters are predicting lower fuel prices, but because of the weak dollar and commodity inflation, it still seems likely to me that we will see $4 diesel before we see $3 diesel. In the 23 weeks since the 2011 peak of $4.124, diesel has fallen by 40.3 cents per gallon. In 2008, in the 23 weeks following the peak, fuel dropped by $2.40 all the way down to $2.37 per gallon. It is hard to get excited about the current price decrease.