This week, diesel fuel prices rose to $3.854 per gallon, up about 3 cents from last week. Since last year, the average diesel fuel price have risen almost 45 cents this has cause many issues with companies without a fuel management program. Crude oil prices remain around $100 per barrel.
A potential factor for this week’s slight price rise is the announced closing of the Hovensa oil refinery in St. Croix, U.S. Virgin Islands. This refinery, one of the largest in the world, will be closing early next month to cut losses according to Hovensa officials. While industry analysts say that this closing will not severely impact the global oil market since it had not been operating at full capacity for years, it may effect Hess prices, since this refinery was a joint Hess and Venezuela’s state-owned oil company venture. You might want to use your fleet fuel cards at Hess stations in the future. Prices will probably decline because it will not be dealing with all the loses from the Hovensa refinery.
Additionally, this past Wednesday, President Obama rejected the Keystone XL Pipeline, which was planned to run from Canada to the U.S. and transport crude from Canada’s oil sands to the Gulf States. While the proposal has been rejected for now, after TransCanada reapplies with a new route, it most likely will pass. At this time, TransCanada officials still believe and expect the pipeline to enter service in late-2014.
Overseas, Iraq is urging Iran to keep open to strategic Strait of Hormuz, where most oil passes from the Middle East to the West. Iran is threatening to close the Strait over increased sanctions on its nuclear program. If this were to happen, both Iraq and Iran would be hit hard. Over 80% of Iran’s foreign currency earnings are from oil exports and 95% for Iraq.
With this rising trend of diesel fuel prices, it is the perfect time to give Sokolis, a fuel management company, a call 267-482-6155. We will help set up a fuel management system with your fleet fuel manager that will help your company save money and become more efficient. We look forward to hearing from you!
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