Analysis by Dr. Nancy Yamaguchi
The Energy Information Administration (EIA) released its weekly data on diesel and gasoline retail prices for the week ended May 7, 2018. Gasoline prices were largely unchanged, but they broke a 3-week upward trend by easing slightly by 0.1 cents. Over the prior three weeks, retail gasoline prices had been rising by roughly five cents per gallon per week. Diesel prices continued to rise in all PADDs across the country. Diesel prices have risen for seven consecutive weeks.
At the national average level, gasoline prices decreased by 0.1 cents/gallon. Diesel prices rose by 1.4 cents per gallon.
Crude prices had been rising strongly in April, but the week ended April 27 brought a small decrease in prices. WTI closed the week at $68.10/b, down by $0.11 over the course of the week. This contributed to a slowdown in the upward trend in refined fuel prices. However, the week ended May 5 brought a surge of $1.57/b in WTI prices, and this is feeding an increase in product prices. US crude supplies continue to grow, and stockpiles have grown as well, but these supply-side issues have failed to dampen the price increase brought on by the prospect of a US pullout of the 2015 accord with Iran.
Price strength continues to encourage growth in US output. US crude production rose by 33 kbpd during the week ended April 27. For the year-to-date, US output has expanded by 1.127 million barrels per day. Crude production of 9492 kbpd during the week ended January 5 has grown to a production level of 10,619 kbpd during the week ended April 27.
US crude stockpiles grew significantly by 6.218 mmbbls during the week ended April 27. Gasoline inventories grew by 1.171 mmbbls. Diesel stocks were drawn down by 3.9 mmbbls (following the prior week’s drawdown of 2.611 mmbbls.)
For the current week ended May 7th, diesel prices rose by 1.4 cents to arrive at an average price of $3.171/gallon. Prices rose in all PADDs across the country. National average prices have exceeded $3/gallon for seven consecutive weeks.
In the East Coast PADD 1, diesel prices increased by 1.6 cents/gallon to arrive at an average of $3.178/gallon. Within PADD 1, New England prices rose by 1.2 cents to average $3.215/gallon. Central Atlantic diesel prices increased by 1.5 cents to average $3.336/gallon. Lower Atlantic prices rose by 1.9 cents to arrive at an average price of $3.061/gallon. PADD 1 prices were 56.6 cents/gallon above their prices for the same week last year.
In the Midwest PADD 2 market, retail diesel prices increased by 0.9 cents to average $3.092/gallon. Prices were 59.5 cents/gallon above their level for the same week last year.
In the Gulf Coast PADD 3, retail diesel prices increased by 0.9 cent to average $2.955/gallon. This price was 54.5 cents higher than for the same week in the previous year. PADD 3 is the only market where diesel prices have not yet crossed the line to territory above $3/gallon.
In the Rocky Mountains PADD 4 market, retail diesel prices rose by 3.4 cents to average $3.249/gallon. PADD 4 prices were 59.8 cents higher than in the prior year.
In the West Coast PADD 5 market, retail diesel prices increased by 2.2 cents to average $3.662/gallon. This price was 81.6 cents above its level from last year. Prices excluding California rose by 1.5 cents to average $3.409/gallon. This price was 66.2 cents above the retail price for the same week last year. California diesel prices rose 2.9 cents to arrive at an average price of $3.863/gallon. This was 93.6 cents higher than last year’s price. Until January, PADD 5 had been the only PADD to have diesel prices above $3 per gallon. Prices around the country climbed until the national retail average exceeded the $3/gallon mark as of the week ended January 15. Product prices then followed crude prices down in the middle of the first quarter. They have followed crude prices back up, rising significantly in recent weeks.
U.S. retail gasoline prices were essentially unchanged, easing slightly by 0.1 cents during the week ended May 7 to arrive at an average price of $2.845/gallon. This broke a three-week upward price trend. Gasoline prices rose in PADDs 1, 4, and 5, while they declined in PADD 2 and remained flat in PADD 3.
For the current week ended May 7, East Coast PADD 1 retail prices for gasoline increased by 0.3 cents to average $2.792/gallon. The average price was 44.4 cents higher than last year’s price. Within PADD 1, prices rose by 2.4 cents in New England to an average of $2.836/gallon. Central Atlantic market prices rose by 0.7 cents to arrive at an average of $2.917/gallon. Prices in the Lower Atlantic market fell by 0.7 cents, to an average price of $2.685/gallon. This was 43.2 cents higher than last year’s average price for the same week.
In the Midwest PADD 2 market, retail gasoline prices dropped by 2.7 cents to arrive at an average price of $2.697/gallon. Gasoline pump prices were 46.5 cents higher than they were one year ago.
In the Gulf Coast PADD 3 market, gasoline prices were unchanged at $2.589/gallon. PADD 3 continues to have the lowest average prices among the PADDs. Prices for the week were 42.1 cents higher than for the same week in 2017.
In the Rocky Mountains PADD 4 market, gasoline pump prices rose by 1.8 cents to average $2.821/gallon. PADD 4 prices were 42.8 cents higher than at the same time in 2017.
In the West Coast PADD 5 market, retail gasoline prices increased by 3.2 cents to arrive at an average price of $3.464/gallon. This was 60.1 cents higher than at the same time a year ago. PADD 5 typically has the highest gasoline prices among the five PADDs. During the eighteen weeks of 2018 to date, PADD 5 has been the only PADD where retail gasoline prices have exceeded $3/gallon. Excluding California, West Coast prices increased by 4.5 cents, to an average price of $3.172/gallon. This was 52.2 cents higher than at the same time in 2017. In California, prices increased by 2.3 cents to arrive at an average pump price of $3.632/gallon. California prices were 64.6 cents per gallon above their levels from last year.