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 June 17, 2019. Gasoline prices fell for the sixth week in a row. Diesel prices fell for the fourth week in a row, and they have fallen for five of the past six weeks. On a national average basis, retail prices for gasoline declined significantly by 6.2 cents/gallon for the week. National average prices for gasoline were 20.9 cents/gallon below where they were in the same week one year ago. On a national average basis, retail prices for diesel decreased by 3.5 cents/gallon. National average prices for diesel were 17.4 cents/gallon lower than they were in the same week last year.
Futures Prices and Retail Price Outlook
During the week June 7-June 14, 2019, West Texas Intermediate (WTI) crude futures dropped by $2.06/b (3.8%.) Gasoline futures prices fell by 2.01 cents/gallon (1.2%.) Diesel futures prices declined slightly by 0.3 cents/gallon (0.186%.) 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 retail prices will continue to decline in the coming week. However, regional markets should watch for increases in ethanol prices and gasoline price volatility, because of severe weather and disasters.
Retail Diesel Prices
For the current week ended June 17, retail diesel prices fell by 3.5 cents to settle at an average price of $3.070/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. For the current week ended June 17, diesel prices fell in all PADDs. The national average price for the week was 17.4 cents/gallon below where it was during the same week last year.
In the East Coast PADD 1, diesel prices fell by 2.6 cents to arrive at an average price of $3.099/gallon. Within PADD 1, New England prices fell by 3.2 cents to average $3.153/gallon. Central Atlantic diesel prices declined by 2.6 cents to average $3.282/gallon. Lower Atlantic prices fell by 2.5 cents to reach an average price of $2.964/gallon. PADD 1 prices were 14.1 cents/gallon below their prices for the same week last year.
In the Midwest PADD 2 market, retail diesel prices fell by 4.5 cents to average $2.957/gallon. Prices were 21.6 cents/gallon below their level for the same week last year. PADD 2 now joins PADD 3 in having diesel prices below $3/gallon.
In the Gulf Coast PADD 3, retail diesel prices fell by 2.3 cents to average $2.820/gallon. PADD 3 typically has the lowest diesel prices among the PADDs. Until the price drop in PADD 2 this past week, PADD 3 was the only PADD where retail diesel prices were below the $3/gallon mark. Prices were 19.6 cents lower than for the same week in the previous year.
In the Rocky Mountains PADD 4 market, retail diesel prices fell by 4.2 cents to settle at an average of $3.072/gallon. PADD 4 prices were 26.7 cents lower than for the same week in the prior year.
In the West Coast PADD 5 market, retail diesel prices fell by 4.9 cents to average $3.666/gallon. This was the largest price decrease among the PADDs. PADD 5 prices were 8.7 cents below their level from last year. Prices excluding California decreased by 4.4 cents to arrive at an average of $3.238/gallon. This price was 23.57 cents below the retail price for the same week last year. California diesel prices fell by 5.2 cents to arrive at an average price of $4.0006/gallon. California is the only market where prices are above $4/gallon. Prices have remained above the $4/gallon mark for the past nine weeks, though they now are above this level by only a fraction of a cent. California diesel prices were 3.0 cents higher than they were at the same week last year.
Retail Gasoline Prices
U.S. retail gasoline prices declined significantly by 6.2 cents to average $2.670/gallon during the week ended June 17. Prices fell in all PADDs. Retail prices for the current week were 20.9 cents per gallon lower than they were one year ago. Gasoline prices hit a peak of $2.903/gallon during the week ended October 8, 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 month of May and the first three weeks of June brought an easing of prices.
For the current week ended June 17th, East Coast PADD 1 retail prices for gasoline fell by 6.3 cents to average $2.557/gallon. The average price was 24.2 cents/gallon below where it was during the same week last year. Within PADD 1, New England prices fell by 5.1 cents to average $2.668/gallon. Central Atlantic market prices fell by 4.0 cents to average $2.738/gallon. Prices in the Lower Atlantic market fell steeply by 8.2 cents to average $2.417/gallon.
In the Midwest PADD 2 market, retail gasoline prices dropped by 7.9 cents to settle at an average price of $2.541/gallon. This was the largest price drop among the PADDs. PADD 2 prices for the current week were 25.0 cents/gallon lower than they were for the same week last year.
In the Gulf Coast PADD 3 market, gasoline prices declined by 2.6 cents to average $2.336/gallon. PADD 3 continues to have the lowest average prices among the PADDs. Prices for the week were 31.8 cents lower than for the same week last year.
In the Rocky Mountains PADD 4 market, gasoline pump prices fell by 3.8 cent to arrive at an average price of $2.910/gallon. This week’s prices were 6.7 cents lower than at the same time last year.
In the West Coast PADD 5 market, retail gasoline prices dropped by 6.9 cents to arrive at an average of $3.452/gallon. PADD 5 continues to have the highest gasoline prices among the five PADDs. It is the only PADD where retail prices are above their levels from one year ago. Prices were 1.8 cents above last year’s level. Excluding California, West Coast prices fell by 7.0 cent to average $3.182/gallon. This price was 5.6 cents lower than at the same time last year. In California, pump prices fell by 6.7 cents to average $3.678/gallon. California prices were 8.7 cents per gallon above their levels from the same week last year.