The average price of diesel will fall to $3.87 per gallon this year, a price drop of 10 cents compared to the average cost of diesel fuel in 2012, according to the U.S. Energy Information Administration.
In its Short-Term Energy Outlook, the agency also predicted an average price of $3.78 per gallon in 2014.
Diesel prices should be at their highest point in the early part of the year, with the EIA predicting prices of $3.93 per gallon in the first quarter. That price will fall to $3.79 per gallon by the fourth quarter. The lowest prices in 2014 will come during the first quarter, with fuel cost experiencing a big jump in the second quarter, only to fall back close to where it started the year by the fourth quarter.
Despite these price improvements, diesel still is being lapped by regular gasoline cost, which will fall to $3.44 per gallon this year and $3.34 per gallon in 2014 after an average of $3.63 per gallon in 2012.
Improved pricing comes on the strength of declining crude cost, which will fall to around $105 a barrel this year and $99 a barrel in 2014. As cost goes down, U.S. crude oil production will go up, reaching 7.9 million barrels per day in 2014. According to the report, U.S. liquid fuel imports have been falling and will average 6 million barrels per day in 2014 off a high of 12.5 million barrels per day in 2005. - Jon Ross