Veltex Corporation (VLXC)

[nightstocker]

A bit of trucking news - Diesel fuel up 1 cent.

Diesel surges above $1.50
By Sean Kelley

After more than 18 months below the $1.50 mark, the national average price of a gallon of diesel rose to $1.501 for the week ending Jan. 6.

The last time the average broached $1.50 was on June 4, 2001. Diesel is now more than 33 cents higher than the same week last year and has risen a dime in three weeks. Truckers in the South and on the East Coast have seen the most severe increases - more than 12 cents in some cases.

The main culprit for the increase is a labor strike in Venezuela, which is in its fifth week of turmoil. U.S. crude oil imports fell to their lowest level since January 2000. Refiners are relying on oil reserves to get diesel and gasoline to the pump.

According to the Department of Energy, which tracks diesel prices and petroleum supplies, if more oil doesn’t enter the system, “crude oil inventories are likely to be drawn down even further … Once that happens, a decline in product inventories is likely, unless demand falls sharply.”

With winter weather already socking parts of the country, demand isn’t expected to fall, and energy analysts are predicting higher prices for fuel. The surge in prices hasn’t been helped by an Organization for Petroleum Exporting Countries pledge to cut oil production, although the group has promised to make up for the oil lost in the Venezuela strike.

The analysts also say that diesel prices are not expected to decrease in the next few months because supplies have fallen below the normal range and are expected to remain low for a few months.