The U.S. Energy Information Administration (EIA) released its weekly data on diesel and gasoline retail prices for the week ended July 22nd, 2019. Prices for both fuels decreased. On a national average basis, retail prices for gasoline fell by 2.9 cents/gallon for the week. Gasoline prices fell in all regions except for the Gulf Coast, which was influenced by Tropical Storm Barry. Barry made landfall in Louisiana as a Category 1 hurricane on Saturday, July 13th, but it quickly was downgraded to a tropical storm, then to a tropical depression. National average prices for gasoline were 8.1 cents/gallon below where they were in the same week one year ago. On a national average basis, retail prices for diesel declined by 0.7 cents/gallon. National average prices for diesel were 17.6 cents/gallon lower than they were in the same week last year.
Futures Prices and Retail Price Outlook
During the week July 15-July 19, 2019, West Texas Intermediate (WTI) crude futures fell by $4.41/b (7.3%.) Gasoline futures prices dropped by 12.14 cents/gallon (6.2%.) Diesel futures prices fell by 8.5 cents/gallon (4.29%.) Prices had been strengthened by the PES refinery closure and by disruptions caused by Tropical Storm Barry. Barry caused less damage than expected, and prices quickly eased. Gasoline and diesel inventories rose significantly during the week. This week has brought renewed geopolitical tension in the Persian Gulf, with conflict between Iran and the U.K. adding to existing conflict between Iran and the U.S. But oil prices have not spiked. Although the relationship between futures market prices and retail prices is not immediate and one-for-one, the most recent trend in futures prices suggests that gasoline and diesel prices will relax in the coming week.
Retail Diesel Prices
For the current week ended July 22, retail diesel prices decreased by 0.7 cents to settle at an average price of $3.044/gallon. Between mid-October and late-January, retail diesel prices fell for fourteen consecutive weeks. During those fourteen weeks, the price decline totaled 42.9 cents/gallon. From February through April, diesel prices crept back up by 20.4 cents/gallon. The month of May brought a modest reversal in the upward trend in diesel prices. During the five weeks of June including the week ended July 1, diesel prices fell more substantially, declining by 10.9 cents/gallon since the last week of May. For the current week ended July 22, diesel prices fell in all PADDs except for PADD 4. The national average price for the week was 17.6 cents/gallon below where it was during the same week last year.
In the East Coast PADD 1, diesel prices declined by 0.8 cents to arrive at an average price of $3.072/gallon. Within PADD 1, New England prices fell by 0.9 cents to average $3.122/gallon. Central Atlantic diesel prices fell by 1.3 cents to average $3.259/gallon. Lower Atlantic prices eased by 0.4 cents to arrive at an average price of $2.937/gallon. PADD 1 prices were 14.5 cents/gallon below their prices for the same week last year.
In the Midwest PADD 2 market, retail diesel prices fell by 0.8 cents to average $2.948/gallon. Prices were 19.4 cents/gallon below their level for the same week last year. PADD 2 joined PADD 3 during the week ended June 17th in having diesel prices fall below $3/gallon.
In the Gulf Coast PADD 3, retail diesel prices edged down by 0.1 cent to average $2.804/gallon. PADD 3 typically has the lowest diesel prices among the PADDs. Prices were 18.9 cents lower than for the same week in the previous year.
In the Rocky Mountains PADD 4 market, retail diesel prices rose by 0.3 cents to arrive at an average of $2.978/gallon. This was the only price increase among the PADDs. Three weeks ago, PADD 4 joined PADDs 3 and 2 in having diesel prices below $3/gallon. PADD 4 prices were 39.1 cents lower than for the same week in the prior year.
In the West Coast PADD 5 market, retail diesel prices fell by 1.3 cents to settle at an average of $3.611/gallon. PADD 5 prices were 10.7 cents below their level from last year. Prices excluding California fell by 1.1 cents to arrive at an average of $3.198/gallon. This price was 23.8 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 $3.939/gallon. Until the week ended June 24, California had been the only major market where diesel prices were above $4/gallon. California prices had been above the $4/gallon mark for nine weeks. California diesel prices were 0.4 cents lower than they were at the same week last year.
Retail Gasoline Prices
U.S. retail gasoline prices fell by 2.9 cents/gallon to reach an average of $2.750/gallon during the week ended July 22nd. Prices had risen during the three previous weeks. Prices fell in all PADDs except for PADD 3. Retail prices for the current week were 8.1 cents per gallon lower than they were one year ago. Gasoline prices hit a peak of $2.903/gallon during the week ended October 8th, 2018. Prices then slid downward for fourteen weeks in a row, shedding a total of 66.6 cents per gallon. In the next seventeen weeks, prices marched back up by 66.0 cents/gallon. Prices came very close to the peak they hit in early October, before the months of May and the June brought an easing of prices. Gasoline prices in May and June retreated by 23.3 cents per gallon. The week ended July 1st reversed that downward trend and sent prices up once again.
Over the prior three weeks, gasoline prices outpaced the increases in crude oil prices and diesel prices mainly because of the explosion and fire at the 335,000-bpd, gasoline-maximizing Philadelphia Energy Systems (PES) refinery. Tropical Storm Barry then caused an uptick in prices as it disrupted oil production, refining and distribution. Fortunately, the storm was less severe than expected. Prices began to relax.
For the current week ended July 22nd, East Coast PADD 1 retail prices for gasoline fell by 0.8 cents to average $2.672/gallon. The average price was 10.4 cents/gallon below where it was during the same week last year. Within PADD 1, New England prices fell by 1.5 cents to average $2.713/gallon. Central Atlantic market prices fell by 1.3 cents to average $2.807/gallon. Prices in the Lower Atlantic market eased by 0.4 cents to settle at an average of $2.576/gallon.
In the Midwest PADD 2 market, retail gasoline prices dropped by 7.4 cents to arrive at an average price of $2.763/gallon. This was the largest price decrease among the PADDs, more than erasing the prior week’s increase of 9.5 cents. PADD 2 prices for the current week were 5.0 cents/gallon lower than they were for the same week last year.
In the Gulf Coast PADD 3 market, gasoline prices increased by 0.8 cents to average $2.463/gallon. This was the only price increase among the five PADDs. PADD 3 continues to have the lowest average prices among the PADDs. Prices for the week were 11.0 cents lower than for the same week last year.
In the Rocky Mountains PADD 4 market, gasoline pump prices fell by 3.6 cents to settle at an average price of $2.735/gallon. This week’s prices were 19.9 cents lower than at the same time last year.
In the West Coast PADD 5 market, retail gasoline prices fell by 2.8 cents to arrive at an average of $3.328/gallon. PADD 5 continues to have the highest gasoline prices among the five PADDs. It is the only PADD where retail prices are above $3/gallon. Prices were 3.0 cents below last year’s level. Excluding California, West Coast prices fell by 1.8 cents to average $3.037/gallon. This price was 12.8 cents lower than at the same time last year. In California, pump prices fell by 3.6 cents to average $3.569/gallon. California prices were 5.5 cents per gallon above their levels from the same week last year.