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 28, 2019. There was little price movement. On a national average basis, retail prices for gasoline rose by 0.5 cents/gallon, while diesel prices were unchanged. Prices have been leveling 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 ended last week. During the week ended January 25, 2019, West Texas Intermediate (WTI) crude futures prices fell by $0.26/b. Gasoline futures prices fell by 5.41 cents/gallon. Diesel futures prices decreased by 1.96 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 strong upward direction of futures prices may be coming to an end, and that prices may reach an equilibrium.
For the current week ended January 28, retail diesel prices were unchanged at an average price of $2.965/gallon. The national average retail price has not been below $3/gallon since March, around ten months ago. Prior to this past week, retail diesel prices had fallen for fourteen consecutive weeks. During those fourteen weeks, the price decline amounted to 42.9 cents/gallon. Prices rose in PADD 1 and fell in all other PADDs. The national average price was 10.5 cents/gallon below its average for the same week one year ago.
In the East Coast PADD 1, diesel prices rose by 1.3 cents to arrive at an average price of $3.05/gallon. Within PADD 1, New England prices dropped by 0.3 cents to average $3.188/gallon. Central Atlantic diesel prices rose by 2.2 cents to average $3.237/gallon. Lower Atlantic prices rose by 0.9 cents to arrive at an average price of $2.893/gallon. PADD 1 prices were 6.2cents/gallon below their prices for the same week last year.
In the Midwest PADD 2 market, retail diesel prices edged down by 0.1 cents to average $2.806/gallon. Prices were 22.4 cents/gallon below their level for the same week last year.
In the Gulf Coast PADD 3, retail diesel prices fell marginally by 0.1 cents to average $2.789/gallon. Nine weeks ago, PADD 3 became the first PADD where retail diesel prices fell below the $3/gallon mark. Four weeks ago, PADD 2 joined PADD 3 in this distinction. Prices were 7.9 cents lower than for the same week in the previous year.
In the Rocky Mountains PADD 4 market, retail diesel prices dropped by 3.3 cents to average $2.911/gallon. This was the largest price decrease among the five PADDs. Two weeks prior, PADD 4 became the third PADD where diesel’s average retail prices fell below $3/gallon. Prices were 5.6 cents lower than in the prior year.
In the West Coast PADD 5 market, retail diesel prices fell by 1.5 cents to average $3.448/gallon. This price was 1.4 cents above its level from last year. PADD 5 is the only PADD remaining where diesel prices are higher than they were one year ago. Prices excluding California fell by 1.6 cents to reach an average of $3.099/gallon. This price was 2.1 cents below the retail price for the same week last year. California diesel prices fell by 1.3 cents to arrive at an average price of $3.726/gallon. California diesel prices were 4.3 cents above last year’s price.
U.S. retail gasoline prices rose modestly by 0.5 cents to average $2.256/gallon during the week ended January 28. Prices rose in PADDs 1, 2 and 3, and prices declined in PADDs 4 and 5. The national average price was 35.1 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 third week in a row that prices rose. Prior to this, retail prices for gasoline had spiraled down for thirteen weeks. Even with the modest price increases of the past few weeks, gasoline prices have dropped dramatically by 64.7 cents/gallon.
For the current week ended January 28th, East Coast PADD 1 retail prices for gasoline rose by 0.7 cents to average $2.249/gallon. The average price was 33.8 cents below last year’s price. Within PADD 1, New England prices fell by 0.3 cents to average $2.346/gallon. Central Atlantic market prices fell by 0.5 cents to average $2.388/gallon. Prices in the Lower Atlantic market rose by 2.2 cents to average $2.138/gallon.
In the Midwest PADD 2 market, retail gasoline prices rose by 1.3 cents to reach an average price of $2.052/gallon. Eleven weeks ago, PADD 2 became the first PADD where gasoline pump prices were lower than they were one year ago. PADDs 1 and 3 joined PADD 2 in this distinction nine weeks ago. PADD 4 joined four weeks ago. PADD 5 joined two weeks ago. PADD 2 prices for the current week were a massive 45.8 cents/gallon lower than they were for the same week last year.
In the Gulf Coast PADD 3 market, gasoline prices rose by 4.5 cents to average $1.959/gallon. This was the largest price increase among the PADDs. 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 38.8 cents lower than for the same week last year.
In the Rocky Mountains PADD 4 market, gasoline pump prices dropped by 4.1 cents to arrive at an average of $2.231/gallon. This was the largest price drop among the PADDs. Four 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 25.2 cents lower than at the same time last year.
In the West Coast PADD 5 market, retail gasoline prices fell by 2.9 cents to arrive at an average of $2.928/gallon. Two 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 3.8 cents to average $2.683/gallon. This was 4.6 cents higher than at the same time last year. In California, pump prices fell by 1.8 cents to average $3.130/gallon. California prices are now 16.6 cents per gallon below their levels from the same week last year.