Diesel joins ranks of record-setters

By Thomas V. Bona

BusinessRockford.com

Diesel prices reached record highs Thursday around the country, topping $3.50 a gallon.

That figure, according to AAA’s fuelgaugereport.com, breaks the record set late last year. The Illinois average was also a record, $3.61 a gallon.

Most Illinois metro areas were at record levels Thursday, but Rockford wasn’t.

Thursday’s price was $3.50 a gallon, 5 cents short of the record set in December.

Transportation industry officials say high diesel prices have increased the prices of food, consumer goods and other items shipped by truck. Trucking companies have increased their fees, igniting fierce competition in a consolidating industry.

Some industry experts and local economic development officials have said the high diesel prices could help the Rockford area because companies may add warehouses and distribution centers to shorten their supply chain.

Oil prices fell Thursday after a government report showed that the nation’s crude-oil supplies rose more than expected last week. But nationwide at the pump, gas prices rose more than 3 cents overnight, a jump that could be a prelude to a bigger price spike this spring.

The inventory report from the Energy Department’s Energy Information Administration was mixed.

Crude-oil inventories rose by 4.2 million barrels last week, and supplies of distillates, which include heating oil, fell by 4.5 million barrels. Analysts surveyed by Dow Jones Newswires expected 2.9 million and 1.5 million barrels, respectively.

Many analysts believe rising supplies and the falling demand noted in several recent reports mean that oil prices eventually will fall.

But they’ve been wrong before. Prices have spiked in recent days on buying fueled in part by investors attracted to the oil market by the falling dollar. Crude futures offer a hedge against a falling dollar, and oil futures bought and sold in dollars are more attractive to foreign investors when the greenback is falling.

The Associated Press contributed to this report. Staff writer Thomas V. Bona may be contacted at 815-987-1343 or tbona@rrstar.com.