Los Angeles, CA (PRWEB) February 24, 2015 -- The diesel fuel market displays a buyer power score of 3.5 out of 5, indicating that market conditions are currently slightly favorable for buyers. Though demand abroad has remained steady, buyers in this market have experienced a greater degree of negotiation power because falling crude oil prices (as a result of increasing domestic production) have decreased market prices, says IBISWorld analyst Keiko Cadby. Buyers suffer from high market concentration, but the homogenous nature of diesel allows them to compare supplier offerings more efficiently and eases the selection process, thereby reducing searching costs for buyers. Furthermore, many states and countries have strict regulations concerning the composition of diesel for on-road vehicles use, which legally compel suppliers to provide compliant products and increases product standardization.
Domestic demand for diesel from the agriculture and residential housing sectors support increases during the harvest and warmer seasons, while decelerating raw material prices have been offsetting growth in diesel fuel prices. Crude oil prices (the largest input in diesel fuel production) have been falling ever so slightly from 2011 to 2014. The US market primarily operates on gasoline, meaning a significant proportion of diesel fuel production is destined for export markets, continues Cadby. Although strong demand abroad tends to leave domestic buyers with little negotiation power during the purchasing process, declining prices have offset this trend and aided buyer power during the past three years.
In the three years to 2017, diesel fuel prices are projected to increase. Prices have been contracting in 2013 and 2014 as economic activity in construction sectors, utilities construction especially, has slowed and demand has leveled. Still, industrial production and European demand have contributed to price growth. A forecast stronger decrease in crude oil prices due to increased oil and gas production in the United States is expected to mitigate price growth over the next three years. 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 and reduces fuel costs. 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.
Executive Summary
Pricing Environment
Price Fundamentals
Benchmark Price
Pricing Model
Price Drivers
Recent Price Trend
Price Forecast
Product Characteristics
Product Life Cycle
Total Cost of Ownership
Product Specialization
Substitute Goods
Regulation
Quality Control
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Imports
Competitive Environment
Market Share Concentration
Market Profitability
Switching Costs
Purchasing Process
Buying Basics
Buying Lead Time
Selection Process
Key RFP Elements
Negotiation Questions
Buyer Power Factors
Key Statistics
About IBISWorld Inc.
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.
Gavin Smith, IBISWorld Inc., +1 (310) 866-5042, [email protected]
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