The U.S. Energy Information Administration (EIA) released its weekly data on diesel and gasoline retail prices for the week ended March 9, 2020. Gasoline and diesel prices both fell once again. Diesel prices fell by 3.7 cents/gallon. Gasoline prices fell by 4.8 cents/gallon. The national average price for gasoline was $2.375/gallon, which was 9.6 cents/gallon below the price for the same week one year ago. Until November, gasoline prices had been below their levels from last year. Prices declined until, during the week ended March 2, retail gasoline prices were a mere 0.001 cent/gallon above last year’s level. Diesel prices had been above last year’s level also, but the recent downward price path sent diesel prices back below their levels of last year. On a national average basis, the retail price for diesel averaged $2.814/gallon, which was 26.5 cents/gallon lower than the price in the same week last year.
Retail prices for diesel have now fallen for nine consecutive weeks, shedding a total of 19.7 cents/gallon. Gasoline prices had risen for mid-February, but they are heading down once again.
Futures Prices and Retail Price Outlook
During the week March 2, 2020 to March 6, 2020, West Texas Intermediate (WTI) crude oil futures prices recovered by $2.39/b (5.5%,) regaining some lost ground after the prior week’s steep drop of $6.11/barrel (11.6%.) Gasoline futures prices rose by 4.8 cents/gallon (3.3%,) after the prior week’s loss of 13.58 cents/gallon (8.3%.) Diesel futures prices climbed back by 3.22 cents/gallon (2.2%) after the prior week’s slump of 19.41 cents/gallon (11.6%.) But the recovery did not last. This week brought a full-blown collapse of oil prices. First, demand is falling because of coronavirus 2019-nCoV. Second, the OPEC+ group’s efforts to support prices via steeper production cuts failed when Russia refused to join. Oil supplies now are expanding because of the apparent dissolution of the OPEC+ producers pact. WTI futures plunged by over $13/b on Monday, March 9. Lows dipped below $28/b. Markets today are staging a modest recovery, but prices remain sharply lower. While the relationship between futures prices and retail prices is not immediate or one-for-one, the sharp retreat in futures prices should bring a decrease in gasoline and diesel retail prices in the coming week.
Retail Diesel Prices
Retail prices for diesel have now fallen for nine consecutive weeks, shedding a total of 26.5 cents/gallon. For the current week ended March 9, retail diesel prices fell by 3.7 cents to settle at an average price of $2.814/gallon. Retail diesel prices had been below the $3/gallon mark until the attacks on Saudi Arabian oil facilities in mid-September. They remained above the $3/gallon mark until the first week of February. For the current week ended March 9th, diesel prices fell in all PADDs countrywide. The national average price for the week was 26.5 cents/gallon below where it was during the same week last year.
In the East Coast PADD 1, diesel prices fell by 3.8 cents to settle at an average price of $2.860/gallon. Within PADD 1, New England prices fell by 3.3 cents to average $2.990/gallon. Central Atlantic diesel prices declined by 2.6 cents to average $3.045/gallon. Lower Atlantic prices fell by 3.9 cents to an average price of $2.709/gallon. PADD 1 prices were 26.3 cents/gallon below their levels for the same week last year.
In the Midwest PADD 2 market, retail diesel prices fell by 3.6 cents to average $2.689/gallon. Prices were 32.2 cents 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. Prices subsequently fell below $3/gallon in PADD 4 and PADD 1. PADD 5 is the only region where diesel prices remain above $3/gallon.
In the Gulf Coast PADD 3, retail diesel prices fell by 5.0 cents to arrive at an average of $2.577/gallon. This was the largest price drop among the PADDs. PADD 3 continues to have the lowest diesel prices among the PADDs, currently 23.7 cents below the U.S. average. Prices were 30.4 cents below their level for the same week in the previous year.
In the Rocky Mountains PADD 4 market, retail diesel prices fell by 2.3 cents to settle at an average of $2.803/gallon. PADD 4 prices were 13.6 cents lower than for the same week in the prior year.
In the West Coast PADD 5 market, retail diesel prices decreased by 2.5 cents to average $3.399/gallon. PADD 5 prices were 10.6 cents below their level from last year. Until December 2019, PADD 5 had been the only district where diesel prices were higher than they were in the same week last year. Subsequently, prices rose until this was true in all other PADDs. But prices have been falling steadily, and the national average price is now well below its level of last year. Prices excluding California fell by 2.8 cents to arrive at an average of $3.026/gallon. This price was 13.6 cents below the retail price for the same week last year. California diesel prices declined by 2.3 cents to settle at an average price of $3.705/gallon. Until the week ended June 24, California had been the only major market where diesel prices were above $4/gallon, where they had been for nine weeks. California prices retreated below $4/gallon from July through October, rose above $4/gallon again during the first three weeks of November, and eased since then. California diesel prices were 7.3 cents lower than they were at the same week last year.
Retail Gasoline Prices
Retail gasoline prices fell by 4.8 cents/gallon to average $2.375/gallon during the week ended March 9th. Prices fell in all PADDs. Retail prices for the current week were 9.6 cents per gallon lower than they were one year ago. Until November, gasoline prices had been below their levels of last year. Prices then rose to surpass last year’s levels in all PADDs. The recent price downturn has now changed this in PADDs 1, 2 and 3, making gasoline a relative bargain in the Midwest, East Coast, and Gulf Coast.
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. However, the months of May and the June brought an easing of prices amounting to 23.3 cents per gallon. The week ended July 1st reversed that downward trend and sent prices up once again. The recent drop in crude prices is pulling gasoline prices down.
For the current week ended March 9th, East Coast PADD 1 gasoline retail prices fell by 4.9 cents to reach an average of $2.302/gallon. The average price was 12.8 cents/gallon below where it was during the same week last year. Within PADD 1, New England prices decreased by 3.5 cents to average $2.402/gallon. Central Atlantic market prices fell by 4.3 cents, arriving at an average of $2.459/gallon. Prices in the Lower Atlantic market dropped by 5.6 cents to average $2.177/gallon.
In the Midwest PADD 2 market, retail gasoline prices dropped by 6.7 cents to average $2.233/gallon. This was the largest price drop among the PADDs. PADD 2 prices for the current week were 16.7 cents/gallon lower than they were for the same week last year.
In the Gulf Coast PADD 3 market, gasoline prices fell by 5.3 cents to average $2.059/gallon. PADD 3 continues to have the lowest average prices among the PADDs, currently 31.6 cents/gallon below the average U.S. price. Prices for the week were 15.8 cents lower than for the same week last year.
In the Rocky Mountains PADD 4 market, gasoline pump prices fell by 3.8 cents to settle at an average price of $2.381/gallon. This week’s PADD 4 prices were 12.8 cents higher than at the same time last year.
In the West Coast PADD 5 market, retail gasoline prices declined by 2.1 cents to average $3.111/gallon. This was 13.3 cents higher than last year’s price. Prices excluding California fell by 2.3 cents to average $2.852/gallon, which was 17.0 cents/gallon above last year’s price. California prices fell by 2.8 cents to average $3.325/gallon. (Note that there must be an error in the EIA data set for the week, since the average drop for PADD 5 was reported at only 2.1 cents per gallon, yet prices were reported to have fallen by more than this in both sub markets.) California prices rose dramatically in late September and early October, attributed to refinery issues, hitting levels above $4/gallon. Prices then began a sustained retreat. Last week’s refinery fire slowed the price decline, but global crude prices dropped sharply this past week, and retail prices are likely to follow. California prices were 10.2 cents per gallon above their levels from the same week last year. Until November, PADD 5 had been the only PADD where prices were higher than they were one year ago. The other PADDs caught up, and prices were higher in all PADDs countrywide until this week, when prices in PADDs 1, 2 and 3 fell below last year’s levels.