The U.S. Energy Information Administration (EIA) released its weekly data on diesel and gasoline retail prices for the week ended March 16, 2020. Gasoline and diesel prices both fell once again, this time by a significant margin. Diesel prices fell by 8.1 cents/gallon. Gasoline prices dropped by 12.7 cents/gallon. The national average price for gasoline was $2.248/gallon, which was a significant 30.0 cents/gallon below the price for the same week one year ago. From late-November through early March, gasoline prices had been above 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, and the recent price declines now have brought gasoline prices back below their levels of last year.
Diesel prices also had been above last year’s level, but prices are now well below their levels of last year. On a national average basis, the retail price for diesel averaged $2.733/gallon, which was 33.7 cents/gallon lower than the price in the same week last year. Retail prices for diesel have now fallen for ten consecutive weeks, shedding a total of 34.6 cents/gallon.
Futures Prices and Retail Price Outlook
During the week March 9, 2020 to March 13, 2020, West Texas Intermediate (WTI) crude oil futures prices fell by $2.10/b (6.4%.) Gasoline futures prices collapsed by 33.49 cents/gallon (27.2%.) Diesel futures prices fell back by 9.0 cents/gallon (7.3%.) Oil prices are continuing to fall. The World Health Organization has declared the coronavirus a global pandemic, ushering in a patchwork quilt of travel restrictions and bans, cancellations of major events, and closures of numerous schools and businesses. WTI futures plunged by over $13/b on Monday, March 9th. 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 ten consecutive weeks, falling by a cumulative 34.6 cents/gallon. For the current week ended March 16th, retail diesel prices dropped significantly by 8.1 cents to settle at an average price of $2.733/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 16th, diesel prices fell in all PADDs countrywide. The national average price for the week was 33.7 cents/gallon below where it was during the same week last year.
In the East Coast PADD 1, diesel prices fell by 7.1 cents to settle at an average price of $2.789/gallon. Within PADD 1, New England prices fell by 7.2 cents to average $2.918/gallon. Central Atlantic diesel prices declined by 5.6 cents to average $2.989/gallon. Lower Atlantic prices dropped by 8.2 cents to an average price of $2.627/gallon. PADD 1 prices were 33.5 cents/gallon below their levels for the same week last year.
In the Midwest PADD 2 market, retail diesel prices fell sharply by 9.8 cents to average $2.591/gallon. This was the largest price drop among the PADDs. Prices were 40.1 cents below their level for the same week last year. PADD 2 joined PADD 3 during the week ended June 17 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 7.3 cents to arrive at an average of $2.504/gallon. PADD 3 continues to have the lowest diesel prices among the PADDs, currently 22.9 cents below the U.S. average. Prices were 36.5 cents below their level for the same week in the previous year.
In the Rocky Mountains PADD 4 market, retail diesel prices fell by 6.1 cents to settle at an average of $2.742/gallon. PADD 4 prices were 20.2 cents lower than for the same week in the prior year.
In the West Coast PADD 5 market, retail diesel prices fell by 7.7 cents to average $3.322/gallon. PADD 5 prices were 17.5 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. However, prices have been falling recently, and the national average price is now well below its level of last year. PADD 5 prices excluding California fell by 7.2 cents to arrive at an average of $2.954/gallon. This price was 18.5 cents below the retail price for the same week last year. California diesel prices fell significantly by 8.0 cents to settle at an average price of $3.625/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 15.6 cents lower than they were at the same week last year.
Retail Gasoline Prices
Retail gasoline prices plunged by 12.7 cents/gallon to average $2.248/gallon during the week ended March 16. Prices fell in all PADDs. Retail prices for the current week were 30.0 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, making gasoline a relative bargain again.
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 16th, East Coast PADD 1 gasoline retail prices fell by 10.9 cents to arrive at an average of $2.193/gallon. The average price was 32.5 cents/gallon below where it was during the same week last year. Within PADD 1, New England prices dropped by 12.9 cents to average $2.273/gallon. Central Atlantic market prices fell by 10.0 cents, arriving at an average of $2.359/gallon. Prices in the Lower Atlantic market dropped by 10.9 cents to average $2.068/gallon.
In the Midwest PADD 2 market, retail gasoline prices plummeted by 19.6 cents to average $2.037/gallon. This was the largest price drop among the PADDs. PADD 2 prices for the current week were 43.8 cents/gallon lower than they were for the same week last year.
In the Gulf Coast PADD 3 market, gasoline prices fell by 9.3 cents to average $1.966/gallon. PADD 3 is the first to break the $2/gallon barrier. PADD 3 continues to have the lowest average prices among the PADDs, currently 28.2 cents/gallon below the average U.S. price. Prices for the week were 33.5 cents lower than for the same week last year.
In the Rocky Mountains PADD 4 market, gasoline pump prices fell by 6.1 cents to settle at an average price of $2.320/gallon. This week’s PADD 4 prices were 0.01 cents lower than at the same time last year.
In the West Coast PADD 5 market, retail gasoline prices fell by 8.8 cents to average $3.023/gallon. This was 0.4 cents lower than last year’s price. Prices excluding California fell by 6.5 cents to average $2.787/gallon, which was 4.5 cents/gallon above last year’s price. California prices dropped by 10.3 cents to average $3.222/gallon. 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. Two weeks ago, a refinery fire slowed the price decline, but global crude prices dropped sharply this month, and retail prices are following. California prices were 4.2 cents per gallon below 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 last week, when prices in PADDs 1, 2 and 3 fell below last year’s levels, and now the current week, when prices in PADDs 4 and 5 also fell below last year’s levels.