As gasoline prices drift and oil falters, the diesel fuel that dominates agriculture, rail transport, heavy construction and road hauling is cheaper than it has been in more than four years, the Energy Department said Monday.

Though that sounds like good news, diesel’s decline is another sign of the depths of the global economy’s funk.

“Diesel prices are down because demand is down,” said Jerry Nickelsburg, senior economist with the UCLA Anderson Forecast, noting that foreign trading partners have also soured on buying U.S. exports.

“Californians, and American households in general, are not buying. Retailers are not ordering. Factories are not building, and trucks are not delivering,” Nickelsburg said.


Analysts said that continuing economic malaise was the primary reason for another sharp hit on oil prices Monday. Unable to find any firm basis for a climb since its record high above $147 a barrel last summer, crude oil for April delivery fell $4.61 to close at $40.15 a barrel on the New York Mercantile Exchange.

Retail gasoline was mixed, up an average of 2.5 cents a gallon over the last week to $1.934 nationwide, according to the Energy Department’s weekly survey of filling stations. In California, the average price of a gallon of self-serve regular fell 7.2 cents to $2.189.

Diesel has followed the economy’s tailspin in a largely uninterrupted decline since the summer, when it hit the record-high averages of $4.764 a gallon nationally and $5.027 a gallon in California.

On Monday, the national average for diesel fell 4.3 cents a gallon to $2.087, a price not seen since February 2005. California’s average dropped 7.5 cents a gallon to $2.144, the lowest since January 2005.


Statistics from the American Trucking Assn. illustrate the demand slump. In December, the most recent month for which figures are available, the truck tonnage freight index fell 11.1% from November, the biggest month-to-month plunge in 15 years and the third-largest drop since the industry organization began keeping data in 1973.

Having too little work to take advantage of cheap fuel was frustrating to long-haul truckers like DuWayne Marshall of Watertown, Wis. Marshall watched colleagues go bankrupt from the record-high diesel costs last year. Now he’s watching them go under from the lack of cargo to haul.

“I know guys who are struggling to make their truck payments. One is watching his condo go into foreclosure. Another is throwing up his hands because his truck and trailer is about to be repossessed,” said Marshall, who hauls produce from California to Wisconsin.

Business is so slow and the orders so small, Marshall said, that he has driven to as many as 14 locations just to fill his truck for one trip back to the Midwest. In good times, that many stops would have filled his truck seven times over, he said.


Such stories are all too common these days, said Todd Spencer, executive vice president of the Owner-Operator Independent Drivers Assn.

“The economic situation is exacerbated for truckers,” said Spencer, whose Grain Valley, Mo., organization represents more than 150,000 truckers. “As fewer goods are shipped, there is less need for the trucks. You’re paying less for fuel, but you aren’t any better off.”

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ron.white@latimes.com