Analysis by Dr. Nancy Yamaguchi
The U.S. Energy Information Administration (EIA) released its weekly data on diesel and gasoline retail prices for the week ended February 4, 2019. There was little price movement. On a national average basis, retail prices for gasoline declined by 0.2 cents/gallon, while diesel prices edged up by 0.01 cents/gallon. Prices have been levelling off, after experiencing dramatic declines since October 2018. National average prices for gasoline and diesel are below their levels from one year ago.
For most of January, crude oil, gasoline and diesel prices rose in futures markets, though the upward price movement transitioned to ups-and-downs. During the week ended February 4, 2019, West Texas Intermediate (WTI) crude futures prices rose strongly by $3.14/b, after having decline modestly the prior week. Gasoline futures prices rose significantly by 10.0 cents/gallon. Diesel futures prices increased by 7.25 cents/gallon. Although the relationship between futures market prices and retail prices is not immediate and one-for-one, the past week suggests that the steady upward direction of futures prices may now be transitioning to a time of ups-and-downs dictated by weekly events.
For the current week ended February 4, retail diesel prices edged up by 0.01 cents to reach an average price of $2.966/gallon. The national average retail price had not been below $3/gallon since March, around ten months ago. Prior to the past two weeks, retail diesel prices had fallen for fourteen consecutive weeks. During those fourteen weeks, the price decline amounted to 42.9 cents/gallon. For the current week ended February 4, prices rose in PADD 2 and fell in all other PADDs. The national average price was 12 cents/gallon below its average for the same week one year ago.
In the East Coast PADD 1, diesel prices fell by 1.2 cents to arrive at an average price of $3.038/gallon. Within PADD 1, New England prices dropped by 1.2 cents to average $3.176/gallon. Central Atlantic diesel prices fell by 1.0 cents to average $3.227/gallon. Lower Atlantic prices fell by 1.4 cents to arrive at an average price of $2.879/gallon. PADD 1 prices were 9.5 cents/gallon below their prices for the same week last year.
In the Midwest PADD 2 market, retail diesel prices rose by 3.3 cents to average $2.839/gallon. This was the only price increase among the PADDs. Prices were 20.5 cents/gallon below their level for the same week last year.
In the Gulf Coast PADD 3, retail diesel prices fell by 1.0 cents to average $2.779/gallon. Ten weeks ago, PADD 3 became the first PADD where retail diesel prices fell below the $3/gallon mark. Five weeks ago, PADD 2 joined PADD 3 in this distinction, and now, retail prices for diesel in all five PADDS are below their levels of one year ago. Prices were 9.5 cents lower than for the same week in the previous year.
In the Rocky Mountains PADD 4 market, retail diesel prices dropped by 2.8 cents to average $2.883/gallon. This was the largest price decrease among the five PADDs. Three weeks prior, PADD 4 became the third PADD where diesel’s average retail prices fell below $3/gallon. Prices were 9.8 cents lower than in the prior year.
In the West Coast PADD 5 market, retail diesel prices fell by 1.3 cents to average $3.435/gallon. This price was 2.5 cents above its level from last year. Until this week, PADD 5 had been the only PADD remaining where diesel prices were higher than they were one year ago. Prices excluding California fell by 1.2 cents to reach an average of $3.087/gallon. This price was 5.7 cents below the retail price for the same week last year. California diesel prices fell by 1.5 cents to arrive at an average price of $3.711/gallon. California diesel prices were at the same level they were at the same week last year.
U.S. retail gasoline prices eased slightly by 0.2 cents to average $2.254/gallon during the week ended February 4. Prices declined in all PADDs except PADD 2, the Midwest. The national average price was 38.3 cents per gallon lower than it was one year ago. Prices in all PADDs are below their levels of one year ago. The slight price decline this week broke a three-week upward trend. Prices remain extremely low, however, given the prior three months of price declines. Gasoline prices have dropped dramatically by 64.9 cents/gallon since hitting a price peak in early October.
For the current week ended February 4, East Coast PADD 1 retail prices for gasoline fell by 0.5 cents to average $2.244/gallon. The average price was 37.0 cents below last year’s price. Within PADD 1, New England prices dropped by 3.3 cents to average $2.313/gallon. Central Atlantic market prices fell by 1.7 cents to average $2.371/gallon. Prices in the Lower Atlantic market rose by 0.7 cents to average $2.145/gallon.
In the Midwest PADD 2 market, retail gasoline prices rose by 2.8 cents to reach an average price of $2.080/gallon. This was the only price increase among the PADDs. Twelve weeks ago, PADD 2 became the first PADD where gasoline pump prices were lower than they were one year ago. All the other PADDs have since joined PADD 2 in this distinction. PADD 2 prices for the current week were a massive 45.5 cents/gallon lower than they were for the same week last year.
In the Gulf Coast PADD 3 market, gasoline prices fell by 2.8 cents to average $1.931/gallon. PADD 3 continues to have the lowest average prices among the PADDs. A little over two years ago, in December 2016, PADD 3 gasoline prices were below the $2/gallon level. PADD 3 prices once again are below this threshold. Prices for the week were 43.7 cents lower than for the same week last year.
In the Rocky Mountains PADD 4 market, gasoline pump prices dropped significantly by 5.6 cents to arrive at an average of $2.175/gallon. This was the largest price drop among the PADDs. This week’s prices were 32.1 cents lower than at the same time last year.
In the West Coast PADD 5 market, retail gasoline prices fell by 1.6 cents to arrive at an average of $2.912/gallon. Three weeks ago, PADD 5 joined the rest of the PADDs in having gasoline prices fall below the $3/gallon level. PADD 5 continues to have the highest gasoline prices among the five PADDs, and it was the last PADD where average retail gasoline prices remained above their levels of last year. Excluding California, West Coast prices dropped by 3.3 cents to average $2.65/gallon. This price was 10.6 cents lower than at the same time last year. In California, pump prices edged up slightly by 0.1 cents to average $3.131/gallon. California prices are now 23.9 cents per gallon below their levels from the same week last year.