Analysis by Dr. Nancy Yamaguchi
The Energy Information Administration (EIA) released its weekly data on diesel and gasoline retail prices for the week ended January 8, 2017. At the national level, gasoline prices edged up by a modest 0.2 cents per gallon, while diesel prices increased by 2.3 cents per gallon. Gasoline prices rose in all PADDs except for the Midwest PADD 2. Diesel retail prices rose in all PADDS except for the Rocky Mountains PADD 4.
Crude prices have risen strongly during the second half of December and the first week of January. By the end of December, WTI crude prices had attained the $60/b level. Prices have remained above $60/b since then, even hitting $62/b at the time of this writing. The OPEC production cuts are gradually tightening supply. US crude inventories were drawn down steadily during the last seven weeks of 2017. Moreover, the Baker Hughes data series shows a leveling off in the active oil and gas rig count. The strong crude prices are likely to bring a continued rise in retail fuel prices in the coming week.
Prices and supply are being strongly influenced by severe winter weather. Winter storm Grayson hit the Northeastern states with particular ferocity. Natural gas prices also soared. Some refinery outages were reported that may constrain local supply, though gasoline and diesel inventories remained ample. In some areas, fuel delivery was delayed because of icy and hazardous conditions.
For the current week ended January 8, diesel prices rose by 2.3 cents to arrive at an average price of $2.996/gallon.
PADD 1 retail diesel prices rose by 4.5 cents to $3.025/gallon. PADD 1 joins PADD 5 in having diesel prices above $3/gallon. Within the PADD, New England prices rose by 6.7 cents to average $3.077/gallon. Central Atlantic diesel prices increased by 5.8 cents to reach $3.209/gallon. This submarket has had diesel prices above $3/gallon for the past nine weeks. Lower Atlantic prices increased by 3.3 cents to arrive at an average price of $2.887/gallon. PADD 1 prices were 37.7 cents/gallon above their prices for the same week last year.
In the Midwest PADD 2 market, retail diesel prices rose by 1.2 cents to average $2.947/gallon. Prices were 40.0 cents/gallon above their level for the same week last year.
In the Gulf Coast PADD 3, retail diesel prices rose by 1.1 cents to average $2.785/gallon. This price was 33.7 cents higher than in the previous year.
In the Rocky Mountains PADD 4 market, retail diesel prices eased by 0.7 cents to average $2.974/gallon. This was the only PADD showing a decline in average retail prices. PADD 4 prices were 43.3 cents higher than in the prior year.
In the West Coast PADD 5 market, retail prices rose by 3.3 cents to average $3.394/gallon. This price was 52.1 cents above its level from last year. Prices excluding California increased by 1.4 cents to average $3.087/gallon, which was 31.3 cents above the retail price for the same week last year. California diesel prices rose by 4.8 cents to an average price of $3.638/gallon. This price was 68.5 cents higher than last year’s price. Until this week brought an increase in PADD 1 prices, PADD 5 had been the only PADD to have diesel prices above $3 per gallon. The upward trend is now bringing retail averages close to the $3/gallon mark on the national level.
U.S. retail gasoline prices increased by a modest 0.2 cents for the week ended January 8, to arrive at an average price of $2.522/gallon.
For the current week ended January 8, East Coast PADD 1 retail prices for gasoline rose by 0.8 cents to $2.50/gallon. The average price was 10.5 cents higher than last year’s price. Prices increased by 2.4 cents in New England to $2.557/gallon. Central Atlantic market prices rose by 2.4 cents to $2.639/gallon. Prices in the Lower Atlantic market moved down by 0.9 cents, to an average price of $2.379/gallon. This was 6.9 cents higher than last year’s average price for the same week.
In the Midwest PADD 2 market, retail gasoline prices fell by 2.5 cents to arrive at an average price of $2.428/gallon. This was the only PADD where prices decreased during the week. Gasoline pump prices were 8.4 cents higher than they were one year ago.
In the Gulf Coast PADD 3 market, gasoline prices rose by 0.4 cents to average $2.242/gallon. PADD 3 continues to have the lowest average prices among the PADDs. Prices for the week were 7.4 cents higher than for the same week in 2017.
In the Rocky Mountains PADD 4 market, gasoline pump prices increased by 0.4 cents to average $2.441/gallon. PADD 4 prices were 18.2 cents higher than at the same time in 2017.
In the West Coast PADD 5 market, retail gasoline prices rose by 3.6 cents to average $3.011/gallon. This was 33.1 cents higher than at the same time a year ago. PADD 5 typically has the highest gasoline prices among the five PADDs, and had retail gasoline prices above $3/gallon for most of Mid-November and early December. As of this week, PADD 5 prices have topped the $3/gallon mark once again. Excluding California, West Coast prices rose by 0.9 cents to an average of $2.687/gallon. This was 22.2 cents higher than at the same time in 2017. In California, prices rose by 5.1 cents, arriving at an average pump price of $3.199/gallon. California prices were 39.5 cents per gallon above their levels from last year.