For the week ending October 24, the U.S average diesel fuel price continued to rise for the third week in a row. At $5.341 per gallon, the price was up 2 cents from the previous week and up $1.628 from the same week a year ago.
To neutralize rising fuel prices, the White House announced three key initiatives. First, the Department of Energy (DOE) will release 15 million barrels of oil from the Strategic Petroleum Reserve (SPR) for December delivery. This action fulfills the President’s intention in March of releasing up to 180 million barrels of SPR crude oil for sale.
As further movement against high prices, the Administration intends to repurchase crude oil for the SPR when prices are at or below $67-$72 per barrel. The repurchase should increase certainty around future crude oil demand and spur production today. Finally, the President is calling on companies to pass on lower energy costs to consumers immediately.
For the week of October 25, the St. Louis barge spot rate increased almost 22 percent from last week to $88.46 per ton. However, this rate is lower than the all-time peak of $105.85 per ton for the week of October 11. Because of low water levels on the Mississippi River System (MRS), barge companies have little capacity in the spot market as they struggle to meet current commitments.
Future rates are also higher than normal: the current low barge availability, combined with new export sales of soybeans’;, have spurred demand for barges in November, December, and early next year. The St. Louis 1-month-rate (for November) reached $58.61 per ton, 384 percent higher than last year and 439 percent higher than the 5-year average.
The St. Louis 3-month-rate (for January) reached $33.99 per ton, 265 percent higher than last year and 270 percent higher than the 5-year average. In the near term, barge challenges and draft restrictions are likely to continue. However, by mid-November, the slightly above-normal rain forecast may begin to provide relief and help stabilize some portions of the MRS.
After the November 10 GTR, USDA will discontinue publication of its rail deliveries to port (rail-to-port) data. Railroads, grain elevators, and ports have voluntarily provided the data weekly for over 40 years. However, over time, a number of reporting entities have stopped providing data, and others have indicated a desire to cease reporting in the near future.
Thus, USDA will no longer be able to provide these data. This week’s GTR feature article discusses two data sources that closely approximate the discontinued data: grain inspections from USDA’s Federal Grain Inspection Service (available in the GTR and on USDA’s AgTransport) and grain shuttle turn data from the Surface Transportation Board (available on
AgTransport).
The Federal Motor Carrier Safety Administration (FMCSA) has canceled its waiver on hours-of-service (HOS) requirements for trucks transporting feed, fuel, propane, and ethanol. After the waiver was first issued in 2020 to help address the national COVID-19 emergency, FMCSA extended the waiver more than 10 times, sometimes modifying it. Based on comments received during the most recent extension period through October 15, FMCSA decided to let the
waiver expire. Only time will tell if these measures will reduce price and demand pressures on fuels but movement toward changing reporting methods and procedures may make decisions easier
Government Goes on Offense Against High Fuel Prices
