Analysis by Dr. Nancy Yamaguchi

 

The Energy Information Administration (EIA) released its weekly data on diesel and gasoline retail prices for the week ended February 5, 2018. At the national level, gasoline prices increased by 3.0 cents per gallon, while diesel prices rose by 1.6 cents per gallon. As was the case last week, both diesel and gasoline prices rose in all PADDs across the country.

During the week ended February 2nd, WTI crude prices subsided by $0.73/b. WTI crude prices were in the range of $56-$57/b in mid-December. By the end of December, they hit the $60/b mark. By late January, WTI prices hit $66/b, prices not seen in three years. During the week ended February 2, however, WTI crude prices began to ease, falling by $0.73/b to close the weekly market at $65.45/b. Currently, WTI prices appear to be heading down to the $63/b level, as US and global equities are plunging in what some investors believe is an overdue downward correction.

Until the current week, however, year-to-date crude prices had been stronger than expected. The higher crude price regime strengthened US fuel prices, despite subdued product demand. During the four weeks of January, apparent demand for gasoline was 8807 kbpd, relative to December 2017’s apparent demand of 9109 kbpd, a drop of 304 kbpd. Diesel product supplied during the four weeks of January was 4178 kbpd, relative to 3991 kbpd in December 2017, an increase of 186 kbpd. If crude prices continue to weaken this week, next week’s retail fuel price report should show a decline as well.

For the current week ended February 5, diesel prices rose by 1.6 cents to arrive at an average price of $3.086 gallon. US national average retail diesel prices have exceeded $3/gallon for four consecutive weeks now. These prices are the highest seen since the week ended January 5 in 2015.

In the East Coast PADD 1, diesel prices rose 2.1 cents during the week to average $3.133/gallon. In early January, PADD 1 joined PADD 5 in having diesel prices above $3/gallon. Within the PADD, New England prices rose by 2.8 cents to average $3.188/gallon. Central Atlantic diesel prices increased by 1.8 cents to reach $3.324/gallon. This submarket has had diesel prices above $3/gallon for the past thirteen weeks. Lower Atlantic prices increased by 2.0 cents to arrive at an average price of $2.988/gallon. PADD 1 prices were 51.5 cents/gallon above their prices for the same week last year.

In the Midwest PADD 2 market, retail diesel prices rose by 1.4 cents to average $3.044/gallon. The week prior, PADD 2 became the third PADD, following PADD 5 and PADD 1, to have retail diesel prices exceed $3 per gallon. Prices were 55.2 cents/gallon above their level for the same week last year.

In the Gulf Coast PADD 3, retail diesel prices increased slightly by 0.6 cents to average $2.874/gallon. This price was 47.1 cents higher than for the same week in the previous year.

In the Rocky Mountains PADD 4 market, retail diesel prices rose by 1.4 cents to average $2.981/gallon. PADD 4 prices were 46.6 cents higher than in the prior year.

In the West Coast PADD 5 market, retail prices increased by 2.6 cents to average $3.46/gallon. This price was 60.4 cents above its level from last year. Prices excluding California rose by 2.4 cents to average $3.144/gallon, which was 39.6 cents above the retail price for the same week last year. California diesel prices rose by 2.8 cents to an average price of $3.711/gallon. This price was 76.7 cents higher than last year’s price. Until three weeks ago, PADD 5 had been the only PADD to have diesel prices above $3 per gallon. The upward trend around the country has brought retail averages above the $3/gallon mark on the national level.

U.S. retail gasoline prices increased by 3.0 cents during the week ended February 5, to arrive at an average price of $2.637/gallon.

For the current week ended February 5th, East Coast PADD 1 retail prices for gasoline rose by 2.7 cents to $2.614/gallon. The average price was 31.3 cents higher than last year’s price. Prices increased by 3.2 cents in New England to $2.638/gallon. Central Atlantic market prices rose by 2.0 cents to $2.743/gallon. Prices in the Lower Atlantic market moved up by 3.0 cents, to an average price of $2.510/gallon. This was 30.4 cents higher than last year’s average price for the same week.

In the Midwest PADD 2 market, retail gasoline prices increased by 2.5 cents to arrive at an average price of $2.535/gallon. Gasoline pump prices were 35.4 cents higher than they were one year ago.

In the Gulf Coast PADD 3 market, gasoline prices rose by 2.1 cents to average $2.368/gallon. PADD 3 continues to have the lowest average prices among the PADDs. Prices for the week were 29.7 cents higher than for the same week in 2017.

In the Rocky Mountains PADD 4 market, gasoline pump prices increased by 1.3 cents to average $2.496/gallon. PADD 4 prices were 26.3 cents higher than at the same time in 2017.

In the West Coast PADD 5 market, retail gasoline prices rose significantly by 5.7 cents to arrive at an average price of $3.145/gallon. This was 44.5 cents higher than at the same time a year ago. PADD 5 typically has the highest gasoline prices among the five PADDs, and its retail gasoline prices exceeded $3/gallon for most of mid-November and early December. During the five weeks of 2018 to date, PADD 5 prices have exceeded $3/gallon. Excluding California, West Coast prices rose by 2.7 cents to an average of $2.756/gallon. This was 27.3 cents higher than at the same time in 2017. In California, prices ran up by 7.4 cents to arrive at an average pump price of $3.37/gallon. California prices were 54.5 cents per gallon above their levels from last year.