No near-term relief seen on fuel, but overall economy to remain strong

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The national average retail price of a gallon of diesel dipped less than a half-cent for the week ending Monday, Oct. 17, to $3.148. That’s still 96 cents more than in the same week of 2004. And the trucking industry should expect no relief well into 2006, one energy expert said.

Speaking Monday at the American Trucking Associations annual meeting in Boston, Mary Novak, managing director of energy service for research and consulting firm Global Insight, said that crude oil will remain at $63 a barrel through March 2006, after which it should drop to $54 a barrel.

The trucking industry is expected to spend $85 billion on fuel this year — a $23 billion increase from 2004, said Bob Costello, ATA chief economist.

Despite no immediate fuel cost relief, Costello said that key economic indicators for trucking are up significantly, year-to-date, from 2004. Freight tonnage, for example, is up 2.2 percent and motor carrier revenues are up 10 percent. The number of loads has increased significantly as well: 6.3 percent for flatbed carriers and 9 percent for less-than-truckload carriers, Costello said. Overall, Costello predicted strong, yet slowing, growth for trucking in 2006.

As a whole, the U.S. economy should continue growing by 3 percent in 2006, said Martin Regalia, chief economist for the U.S. Chamber of Commerce. Key indicators such as household income and wage growth are up from 2004, but Regalia said he is concerned about household debt and the Federal Reserve raising the prime interest rate through 2006.

The national average price has been stagnant for two weeks. Since a 34-cent one-week increase early in the month in the wake of Hurricane Rita, the price hasn’t increased significantly, but it hasn’t dropped significantly, either.

For the week ending Monday, Oct. 17, the average price decreased in every region tracked by the U.S. Department of Energy, with two exceptions: the West Coast, where the price increased 3 cents; and the Rockies, where the price increased a penny. The biggest decrease was in the Lower Atlantic, where the price dropped by a nickel.

The Lower Atlantic still, however, had the highest average diesel price, at $3.199. The lowest average price was in New England at $2.913.

For state-by-state diesel prices, updated daily, visit http://www.etrucker.com/apps/promiles/fuelprices.asp.