On Monday, we reported that fuel was again setting new price records. Oil markets continued setting new highs, with diesel prices heading towards $2.60, a price not seen since October 2014. It’s worth noting that at no time in diesel market history have prices stayed at $2.60 – prices only pass that level on their way to $3/gal or higher prices. Toward the end of the week, though, we’ve begun to see prices falling back.
Earlier this week, we reviewed the EIA’s forecast for conventional vs electric light-duty vehicles. The government agency expects the world’s conventional light-duty fleet to peak in 2038. The analysis suggests a substantial increase in EVs following 2030, with EVs accounting for 31% of the world’s light vehicles by 2050. While the forecast from the EIA is helpful, it does not consider changes in heavy-duty vehicles, which drive the lion’s share of diesel demand.
Finally, Thursday saw oil prices hit a two-week low in response to Iran considering the possibility of returning to negotiations with world powers. The prospect of lifting US nuclear sanctions on Iran’s 2 million barrels per day of oil production is bearish for prices. With Iran controlling nearly 10% of the world’s oil reserves, we should expect to see prices move around in the coming months as a result of talks with Iran. Although talks are resuming, though, it will likely take months for anything concrete to go into effect.
This Week in Energy Prices
Today crude opened at a price of $83.09, a change of $0.89 from Monday’s opening price of $83.98. After peaking on Monday, crude steadily declined throughout the week. This morning’s opening price was the lowest of the week.
Diesel opened today at $2.5435, a change of $0.0345 from Monday’s opening price of $2.5090. This week diesel was extremely volatile, with a major drop-off occurring between Wednesday and Thursday.
Today gasoline opened at a price of $2.4434, a change of $0.0491 from Monday’s opening price of $2.4925. Gasoline prices throughout the week followed the same trend of volatility, with major price drop-offs happening in the middle portion of the week.