Retail Diesel Prices Ready to Blast Off, According to OPIS

http://www.opisnet.com/fmuweb/index.html

LAKEWOOD, N.J., April 19 -- Trucking fleets may face a budget-busting surprise in the next few weeks. High gasoline prices have received attention as we approach the summer drive season, but wholesale diesel prices are also soaring and those advances have yet to be passed down to the pump.

According to Ben Brockwell, senior analyst at Oil Price Information Service (OPIS), distillate demand has been phenomenal at a time when it should be waning. "We're coming off of a winter of record consumption. Part of the problem stems from sky-high natural gas prices," Brockwell added. "It was more economical for utilities to switch to diesel and that put a giant dent in distillate inventories."

The start of the planting season has put even more stress on supply. California and Midwest diesel inventories are at alarming levels. This month, wholesale prices at the Group 3 spot market increased 21% from $0.94/gal to $1.14/gal, and Los Angeles wholesale prices are up 50% to $1.50/gal. Although high diesel prices don't attract the same angst as high gasoline prices, the result could mean less money for consumers. Trucking companies will need to pass the increased costs onto their customers with surcharges, which will mean higher prices on everyday goods. And most fleet executives insist surcharges never cover additional overhead, so their bottomlines suffer.

But, some fleet managers are smiling every time they fuel and aren't worried about higher prices ahead.

They benefited from simple risk management tools learned at the exclusive OPIS Fuel Management University that allowed them to lock in their fuel price months ago. Today they're paying almost half of what their competitors do for fuel. Experts predict the next several years will see violent price swings for petroleum products, and the only way for trucking companies to survive is to manage their risk effectively.

The next OPIS Fuel Management University, June 9-11, 2004 in Chicago, will provide fleet managers with the knowledge and tools they need to make the market work for them and avoid getting whipsawed by wild price swings.

The 2-1/2 day course is taught by Elaine Levin, one of the most dynamic, well-respected risk management authorities.

For more information, call 800-260-1545 or click http://www.opisnet.com/fmuweb/index.html.

As a bonus, all attendees get to tour the Chicago Mercantile Exchange, giving fuel buyers a feel for the pulse of futures trading with rapid-fire hand signals completing transactions.