Diesel prices are forecast to contract due to declining crude oil prices, but demand from export markets will likely remain steady and offset some price decline during the period
Los Angeles, CA (PRWEB) October 26, 2014
The diesel fuel market displays a buyer power score of 3.6 out of 5, indicating that market conditions are currently favorable for buyers. Though demand abroad has remained steady, buyers in this market have experienced a greater degree of negotiation power because decelerating crude oil prices have been slowing price growth, says IBISWorld analyst Kiera Outlaw.
In the three years to 2014, diesel fuel prices have been growing at an annualized rate of 0.6%. A number of factors including seasonality, easing input costs and strong export demand have contributed to this anemic price growth. From the start of the harvest season to the end of winter, domestic demand for diesel fuel increases, stemming from the agriculture and residential housing sectors. However, declining raw material prices for suppliers, such as Royal Dutch Shell PLC, ExxonMobil Corporation and BP PLC, have been offsetting growth in diesel fuel prices during the three-year period, says Outlaw. Crude oil prices (the largest input in diesel fuel production) have been growing at an estimated annualized rate of 0.1% during the three-year period. The US market primarily operates on gasoline, meaning a significant proportion of diesel fuel production is destined for export markets. Although strong demand abroad tends to leave domestic buyers with little negotiation power during the purchasing process, declining prices are expected to offset that trend and aid buyer power on the domestic market.
In the three years to 2017, diesel fuel prices are projected to decline at an annualized rate of 0.7%. Prices have been contracting in 2013 and 2014 as economic activity in construction sectors, especially utilities construction, has begun slowing and demand has begun to level. Continued contraction (through 2016), combined with an expected easing of regulatory change, will give buyers more leverage during the negotiation process. For more information, visit IBISWorld’s Diesel Fuel procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of diesel fuel, which is a fractional distillate of petroleum fuel oil that has better fuel economy characteristics than traditional fuel. There are various applications for diesel fuel, which include transportation, farming and off-road uses in sectors such as mining, construction and logging. Moreover, diesel fuel can be used in an array of gas-powered machinery and reduces fuel costs.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Buying Lead Time
Key RFP Elements
Buyer Power Factors
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IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorld’s procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.