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Despite falling crude oil and gas prices throughout the United States, diesel fuel prices are moving in the opposite direction.
The Energy Information Administration’s tracked data show diesel prices rising by as much as 5.2 cents per gallon on average, nearly identical to the amount by which gasoline prices are falling. Current prices are more than 15 cents cheaper per gallon than this week last year, but an increase in demand will likely keep prices on the uptick.
A number of converging factors will have a combined effect on diesel fuel prices in the coming weeks:
- Weather – Cold weather means increased demand for heating oil, which is produced from the same part of a crude oil barrel as is diesel fuel. With meteorologists predicting a repeat of last year’s polar vortex, both heating oil and diesel may come at a premium.
- Competition – Truck drivers are not the only ones who use diesel fuel. Oilfield service operators require diesel fuel for their rigs and other equipment, and a number of consumer vehicles on the market also run on diesel.
- Holiday – With just two weeks to go until Thanksgiving and the full force of the holiday shopping season, carriers are already beginning to travel more miles to deliver merchandise to keep shippers’ shelves full. More miles driven = more diesel required.
If not kept in check, diesel fuel prices can easily cause smaller owner-operators to fold under the cost pressure. Fortunately, there are a number of financing options to help trucking companies close the cash flow gap. Factor Finders can connect you with the right truck factoring company to keep your units running through the winter, with industry-low rates and the additional diesel fuel support you need.
Contact Factor Finders today to find the best truck factoring company for your hauling needs!
