The U.S. Energy Information Administration (EIA) released its weekly data on diesel and gasoline retail prices for the week ended March 23, 2020. Gasoline and diesel prices both fell once again, again by a significant level. Diesel prices fell by 7.4 cents/gallon. Gasoline prices dropped by 12.8 cents/gallon. The national average price for gasoline was $2.120/gallon, which was a significant 50.3 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 significantly 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 $2.659/gallon, which was 42.1 cents/gallon lower than the price in the same week last year. Retail prices for diesel have now fallen for eleven consecutive weeks, shedding a total of 42.0 cents/gallon.
Futures Prices and Retail Price Outlook
During the week March 16, 2020 to March 20, 2020, West Texas Intermediate (WTI) crude oil futures prices fell by $8.16/b (24.2%.) Gasoline futures prices plunged 23 cents/gallon (25.1%.) Diesel futures prices dropped 12.33 cents/gallon (12.6%.) Oil prices are continuing to fall as the COVID-19 pandemic spreads. As of March 23rd, over 367,000 cases were confirmed worldwide. WTI futures have collapsed by over $28/b over the past four weeks. While the relationship between futures prices and retail prices is not immediate or one-for-one, the sharp retreat in futures prices should bring another decrease in gasoline and diesel retail prices in the coming week.
Retail Diesel Prices
Retail prices for diesel have now fallen for eleven consecutive weeks, falling by a cumulative 42 cents/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 week ended February 3, and they have continued to decline since then. For the current week ended March 23rd, retail diesel prices dropped significantly by 7.4 cents to settle at an average price of $2.733/gallon. For the current week ended March 23rd, diesel prices fell in all PADDs countrywide. The national average price for the week was 42.1 cents/gallon below where it was during the same week last year.
In the East Coast PADD 1, diesel prices fell by 6.5 cents to settle at an average price of $2.724/gallon. Within PADD 1, New England prices fell by 6.9 cents to average $2.849/gallon. Central Atlantic diesel prices fell by 7.8 cents to average $2.911/gallon. Lower Atlantic prices decreased by 5.4 cents to an average price of $2.573/gallon. PADD 1 prices were 40.8 cents/gallon below their levels for the same week last year.
In the Midwest PADD 2 market, retail diesel prices fell sharply by 9.2 cents to average $2.499/gallon. This was the largest price drop among the PADDs. Prices were 49.4 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 6.6 cents to arrive at an average of $2.438/gallon. PADD 3 continues to have the lowest diesel prices among the PADDs, currently 22.1 cents below the U.S. average. Prices were 43.8 cents below their level for the same week in the previous year.
In the Rocky Mountains PADD 4 market, retail diesel prices fell by 6.2 cents to settle at an average of $2.680/gallon. PADD 4 prices were 29.4 cents lower than for the same week in the prior year.
In the West Coast PADD 5 market, retail diesel prices fell by 7.4 cents to average $3.248/gallon. PADD 5 prices were 27.8 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 markedly, and the national average price is now well below its level of last year. PADD 5 prices excluding California fell by 7.5 cents to arrive at an average of $2.879/gallon. This price was 27.7 cents below the retail price for the same week last year. California diesel prices fell by 7.3 cents to settle at an average price of $3.552/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 26.7 cents lower than they were at the same week last year.
Retail Gasoline Prices
Retail gasoline prices plummeted by 12.8 cents/gallon to average $2.12/gallon during the week ended March 23. Prices fell in all PADDs. Retail prices for the current week were a massive 50.3 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 changed this, making gasoline a bargain again. If the current trend continues, it seems likely that the average retail price will fall below the $2/gallon mark, which has not happened in over four years.
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, and the COVID-19 pandemic is expected to cause a severe contraction in demand.
For the current week ended March 23, East Coast PADD 1 gasoline retail prices fell by 10.9 cents to arrive at an average of $2.084/gallon. The average price was 48.3 cents/gallon below where it was during the same week last year. Within PADD 1, New England prices dropped by 13.5 cents to average $2.138/gallon. Central Atlantic market prices fell by 10.4 cents, arriving at an average of $2.255/gallon. Prices in the Lower Atlantic market dropped by 10.8 cents to average $1.96/gallon.
In the Midwest PADD 2 market, retail gasoline prices dove by 16.4 cents to average $1.873/gallon. This was the largest price drop among the PADDs. It drove prices below the $2/gallon mark. PADD 2 prices for the current week were 68.9 cents/gallon lower than they were for the same week last year.
In the Gulf Coast PADD 3 market, gasoline prices fell by 10.6 cents to average $1.86/gallon. Last week, PADD 3 was the first to break the $2/gallon barrier, joined by PADD 2 this week. PADD 3 continues to have the lowest average prices among the PADDs, currently 26.0 cents/gallon below the average U.S. price. Prices for the week were 51.9 cents lower than for the same week last year.
In the Rocky Mountains PADD 4 market, gasoline pump prices fell by 8.3 cents to settle at an average price of $2.237/gallon. This week’s PADD 4 prices were 16.3 cents lower than at the same time last year.
In the West Coast PADD 5 market, retail gasoline prices fell by 14.5 cents to average $2.878/gallon. Until this week, PADD 5 had been the only PADD where retail gasoline prices had been above $3/gallon. Prices this week were 26.6 cents lower than last year’s price. Prices excluding California fell by 13.3 cents to average $2.654/gallon, which was 19.5 cents/gallon below last year’s price. California prices dropped sharply by 15.6 cents to average $3.066/gallon. On Thursday March 19, California took the dramatic step of ordering a statewide shelter-in-place to combat the spread of COVID-19. This order is affecting approximately 40 million people, and it will cause a dramatic drop in gasoline demand. California prices were 32.3 cents per gallon below their levels from the same week last year.
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. Three weeks ago, a refinery fire slowed the price decline, but global crude prices dropped sharply this month, and retail prices are following. 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.