Analysis by Dr. Nancy Yamaguchi
The U.S. Energy Information Administration released its weekly data on diesel and gasoline retail prices for the week ended January 21, 2019. The price movements were relatively modest. On a national average basis, retail prices for gasoline edged up by 0.4 cents/gallon, while diesel prices fell by 1.1 cents/gallon. Prices have fallen drastically since October, and national average prices for gasoline and diesel are now 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 18, 2019, West Texas Intermediate (WTI) crude futures prices rose by $3.02/b. Gasoline futures prices rose significantly by 8.35 cents/gallon. Diesel futures prices increased by 5.82 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 the steady downward movement in retail prices is coming to an end.
For the current week ended January 21, retail diesel prices decreased by 1.1 cents to an average price of $2.965/gallon. The national average retail price has not been below $3/gallon since March, around ten months ago. This was the fourteenth consecutive week that retail diesel prices have fallen. During these fourteen weeks, the price decline has amounted to 42.9 cents/gallon. Prices fell in all PADDs except for PADD 3, the Gulf Coast. The national average price was 6.0 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 $3.037/gallon. Within PADD 1, New England prices dropped by 1.7 cents to average $3.208/gallon. Central Atlantic diesel prices declined slightly by 0.2 cents to average $3.215/gallon. Lower Atlantic prices fell by 1.9 cents to arrive at an average price of $2.884/gallon. PADD 1 prices were 4.1 cents/gallon below their prices for the same week last year.
In the Midwest PADD 2 market, retail diesel prices fell by 1.6 cents to average $2.807/gallon. Prices were 16.4 cents/gallon below their level for the same week last year.
In the Gulf Coast PADD 3, retail diesel prices rose marginally by 0.2 cents to average $2.790/gallon. Eight weeks ago, PADD 3 became the first PADD where retail diesel prices fell below the $3/gallon mark, and three weeks ago, PADD 2 joined PADD 3 in this distinction. Prices were 2.5 cents lower than for the same week in the previous year.
In the Rocky Mountains PADD 4 market, retail diesel prices dropped by 4.3 cents to average $2.987/gallon. This was the largest price decrease among the five PADDs. In the prior week, PADD 4 became the third PADD where diesel’s average retail prices fell below $3/gallon. Prices were 1.1 cents lower than in the prior year.
In the West Coast PADD 5 market, retail diesel prices fell by 0.8 cents to average $3.463/gallon. This price was 6.8 cents above its level from last year. Prices excluding California fell by 1.5 cents to reach an average of $3.115/gallon. This price was 3.2 cents above the retail price for the same week last year.
California diesel prices fell slightly by 0.3 cents to arrive at an average price of $3.739/gallon. California diesel prices were 9.6 cents above last year’s price.
U.S. retail gasoline prices rose slightly by 0.4 cents to average $2.251/gallon during the week ended January 21. Prices rose in PADDs 1 and 3, and prices declined in PADDs 2, 4 and 5. The national average price was 31.6 cents per gallon lower than it was one year ago. Prices in all PADDs are below their levels of one year ago. This was the second week in a row that prices rose, albeit by a very small amount. Prior to this, retail prices for gasoline had spiraled down for thirteen weeks. Viewing the last fifteen weeks in total, gasoline prices have plummeted by 65.2 cents/gallon.
For the current week ended January 21, East Coast PADD 1 retail prices for gasoline rose by 2.5 cents to average $2.242/gallon. This was the largest price increase among the PADDs. The average price was 31.4 cents below last year’s price. Within PADD 1, New England prices fell by 0.6 cents to average $2.349/gallon. Central Atlantic market prices rose by 0.5 cents to average $2.393/gallon. Prices in the Lower Atlantic market jumped by 4.7 cents to average $2.116/gallon.
In the Midwest PADD 2 market, retail gasoline prices fell by 0.8 cents to reach an average price of $2.039/gallon. Ten 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 eight weeks ago. PADD 4 joined three weeks ago. PADD 5 joined last week. PADD 2 prices for the current week were 43.0 cents/gallon lower than they were for the same week last year.
In the Gulf Coast PADD 3 market, gasoline prices rose by 0.4 cents to average $1.914/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 39.5 cents lower than for the same week last year.
In the Rocky Mountains PADD 4 market, gasoline pump prices dropped by 3.4 cents to arrive at an average of $2.272/gallon. This was the largest price drop among the PADDs. Three 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 20.0 cents lower than at the same time last year.
In the West Coast PADD 5 market, retail gasoline prices fell by 2.3 cents to arrive at an average of $2.957/gallon. Last week, 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 3.5 cents to average $2.721/gallon. This was 1.7 cents higher than at the same time last year. In California, pump prices dropped by 1.3 cents to average $3.148/gallon. California prices are now 6.1 cents per gallon below their levels from the same week last year.