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 January 14, 2019. Prices have fallen momentously since their peaks in October, but the steady downward trek in prices appears to be coming to an end. Retail prices for gasoline rose by a penny, while diesel prices continued to fall. On a national average basis, gasoline prices rose by 1.0 cents/gallon, while diesel prices fell by 3.7 cents/gallon. Gasoline prices have fallen drastically since October, and the national average price is significantly below where it was one year ago. This week, diesel prices also fell below their levels from one year ago.
Crude oil, gasoline and diesel prices have gained some price recovery in futures markets. During the week ended January 11, 2019, West Texas Intermediate (WTI) crude futures prices recovered by $2.86/b. Gasoline futures prices recovered by 5.41 cents/gallon. Diesel futures prices jumped by 9.87 cents/gallon. Although the relationship between futures market prices and retail prices is not immediate and one-for-one, the upward direction of futures prices suggests that retail prices will begin to rise in the coming week.
For the current week ended January 14, retail diesel prices dropped by 3.7 cents to an average price of $2.976/gallon. The national average retail price has not been below $3/gallon since March, around nine months ago. This was the thirteenth consecutive week that retail diesel prices have fallen. During these thirteen weeks, the price decline has amounted to 41.8 cents/gallon. Prices fell in all PADDs. This week marks another milestone: The national average price fell 5.2 cents/gallon below its average for the same week one year ago.
In the East Coast PADD 1, diesel prices fell by 2.0 cents to arrive at an average price of $3.049/gallon. Within PADD 1, New England prices declined by 0.8 cents to average $3.208/gallon. Central Atlantic diesel prices fell by 2.5 cents to average $3.217/gallon. Lower Atlantic prices fell by 1.8 cents to arrive at an average price of $2.903/gallon. PADD 1 prices were 1.4 cents/gallon below their prices for the same week last year.
In the Midwest PADD 2 market, retail diesel prices dropped by 4.6 cents to average $2.823/gallon. Two weeks ago, PADD 2 prices fell below their levels of one year ago. Prices were 15.8 cents/gallon below their level for the same week last year.
In the Gulf Coast PADD 3, retail diesel prices declined by 3.3 cents to average $2.788/gallon. Seven weeks ago, PADD 3 became the first PADD where retail diesel prices fell below the $3/gallon mark, and two weeks ago, PADD 2 joined PADD 3 in this distinction. Prices were 3.7 cents lower than for the same week in the previous year.
In the Rocky Mountains PADD 4 market, retail diesel prices dropped by 3.9 cents to average $2.987/gallon. PADD 4 became the third PADD where diesel’s average retail prices fell below $3/gallon. Prices were a scant 0.03 cents higher than in the prior year.
In the West Coast PADD 5 market, retail diesel prices fell by 5.7 cents to average $3.471/gallon. This was the largest price decrease among the five PADDs. This price was 7.0 cents above its level from last year. Prices excluding California dropped significantly by 5.0 cents to reach an average of $3.13/gallon. This price was 3.2 cents above the retail price for the same week last year. California diesel prices fell significantly by 6.3 cents to arrive at an average price of $3.742/gallon. California diesel prices were 10.1 cents above last year’s price.
U.S. retail gasoline prices rose by 1.0 cents to average $2.247/gallon during the week ended January 14th. Prices rose in PADDs 1, 2 and 3, and prices continued to fall in PADDs 4 and 5. The national average price was 31.0 cents per gallon lower than it was one year ago. Prices in all PADDs are below their levels of one year ago. Before this week’s increase of one cent per gallon, retail prices for gasoline had spiraled down for thirteen weeks. Even with the restoration of one cent, gasoline prices have plummeted by 65.6 cents/gallon.
For the current week ended January 14th, East Coast PADD 1 retail prices for gasoline edged up by 0.1 cents to average $2.217/gallon. The average price was 30.0 cents below last year’s price. Within PADD 1, New England prices fell by 2.3 cents to average $2.355/gallon. Central Atlantic market prices declined by 0.8 cents to average $2.388/gallon. Prices in the Lower Atlantic market rose by 1.4 cents to average $2.069/gallon.
In the Midwest PADD 2 market, retail gasoline prices rose by 4.4 cents to reach an average price of $2.047/gallon. Nine weeks ago, PADD 2 became the first and only PADD where gasoline pump prices were lower than they were one year ago. PADDs 1 and 3 joined PADD 2 in this distinction seven weeks ago. PADD 4 joined two weeks ago. PADD 5 joined this week. PADD 2 prices for the current week were a massive 46.0 cents/gallon lower than they were for the same week last year.
In the Gulf Coast PADD 3 market, gasoline prices rose by 2.4 cents to average $1.91/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 36.6 cents lower than for the same week last year.
In the Rocky Mountains PADD 4 market, gasoline pump prices dropped by 6.7 cents to arrive at an average of $2.306/gallon. This was the largest price drop among the PADDs. Two weeks ago, PADD 4 joined PADDs 1, 2, and 3 in having prices lower than they were one year ago. This week’s prices were 14.9 cents lower than at the same time last year.
In the West Coast PADD 5 market, retail gasoline prices fell by 3.2 cents to arrive at an average of $2.98/gallon. 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 4.7 cents to average $2.756/gallon. This was 6.4 cents higher than at the same time last year. In California, pump prices dropped by 2.2 cents to average $3.161/gallon. California prices are now 3.5 cents per gallon below their levels from the same week last year.