This is a rare summer when crystal ball prognosticators were dead wrong about fuel prices. Be thankful. And, because of it you should be "sniffing out" gasoline and diesel fuel prices for the farm.
Fuel prices normally experience a summer spike, not a slow slide. So this summer's markets for gasoline and diesel fuel present a golden opportunity to replenish farm fuel reserves before heading into harvest.
Last week, global oil prices took out eight-month lows as markets continued to react to disappointing economic news across the globe. On Friday, U.S. crude oil recovered only slightly from Thursday's $78.54-a-barrel bottom.
Rising U.S. oil production also is pressuring prices, according to Tom Kloza, chief oil analyst of the Oil Price Information Service. One reason is that a lot of domestically-produced crude oil is coming on line much faster rate than anticipated. That's having a major impact on gasoline and diesel fuel prices, adds Kloza, whose firm compiles retail pump price averages for the American Auto Association.
He predicts fuel prices will continue to fall well into the fall. "The market is telling you that right around Election Day, the average [retail pump] price is going to be below $3 a gallon."
Fueled by worldwide economic slump
Continuing financial troubles in the European Union, signs of economic slow-down in China and elsewhere, plus bond rating downgrades of major world banks also had a heavy hand in dropping global crude oil prices – as well as farm gasoline and diesel fuel.Just remember: What goes down also goes up. A report from Germany's Commerzbank suggests and that commodities will reach a price bottom "by the late summer at the latest."