EIA Gasoline and Diesel Retail Prices Update, March 31, 2020

The U.S. Energy Information Administration (EIA) released its weekly data on diesel and gasoline retail prices for the week ended March 30, 2020. Gasoline and diesel prices both fell once again, again by a significant level. Diesel prices fell by 7.3 cents/gallon. Gasoline prices dropped by 11.5 cents/gallon. The national average price for gasoline was $2.005/gallon, which was a massive 68.6 cents/gallon below the price for the same week one year ago. Prices in three of five PADDs have fallen below the $2/gallon level, and it seems only a matter of days before the national average does as well. 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. The dramatic price declines since then 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 $2.586/gallon, which was 49.2 cents/gallon lower than the price in the same week last year. Retail prices for diesel have now fallen for twelve consecutive weeks, shedding a total of 49.3 cents/gallon.

Futures Prices and Retail Price Outlook

During the week March 23, 2020 to March 27, 2020, West Texas Intermediate (WTI) crude oil futures prices rose by $0.77/b (3.4%.) Gasoline futures prices declined 3.37 cents/gallon (5.6%.) Diesel futures prices recouped 7.22 cents/gallon (7.2%.) The price recovery was based in part on news of the U.S. Congress signing an economic stimulus bill. Oil prices largely subsided again on Monday, but they have received a boost from a phone call between U.S. President Trump and Russian President Putin, who discussed the importance of stability in energy markets. No action was taken, however. WTI futures are around $21/b today, but the current thinking is that the $20/b threshold will not last. The current drop in demand is estimated to be at least 20 million barrels per day. Storage is becoming a serious constraint. While the relationship between futures prices and retail prices is not immediate or one-for-one, the 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 twelve consecutive weeks—every week this year since the first week of January. Prices have fallen by a cumulative 49.3 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 30, retail diesel prices dropped significantly by 7.3 cents to settle at an average price of $2.586/gallon. For the current week ended March 30th, diesel prices fell in all PADDs countrywide. The national average price for the week was 49.2 cents/gallon below where it was during the same week last year.

In the East Coast PADD 1, diesel prices fell by 5.3 cents to settle at an average price of $2.671/gallon. Within PADD 1, New England prices fell by 5.6 cents to average $2.793/gallon. Central Atlantic diesel prices fell by 4.5 cents to average $2.866/gallon. Lower Atlantic prices decreased by 5.9 cents to an average price of $2.514/gallon. PADD 1 prices were 45.6 cents/gallon below their levels for the same week last year.

In the Midwest PADD 2 market, retail diesel prices fell by 6.7 cents to average $2.432/gallon. Prices were 55.2 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 7.5 cents to arrive at an average of $2.363/gallon. PADD 3 continues to have the lowest diesel prices among the PADDs, currently 22.3 cents below the U.S. average. Prices were 50.9 cents below their level for the same week in the previous year.

In the Rocky Mountains PADD 4 market, retail diesel prices fell by 8.8 cents to settle at an average of $2.592/gallon. PADD 4 prices were 41.5 cents lower than for the same week in the prior year.

In the West Coast PADD 5 market, retail diesel prices plunged by 12.2 cents to average $3.126/gallon. This was the largest price drop among the PADDs. PADD 5 prices were 41.5 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 dramatically, and the national average price is now well below its level of last year. PADD 5 prices excluding California fell by 8.1 cents to settle at an average of $2.798/gallon. This price was 35.5 cents below the retail price for the same week last year. California diesel prices plummeted by 15.7 cents to settle at an average price of $3.395/gallon. Until the week ended June 24th, 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 45.4 cents lower than they were at the same week last year.

Retail Gasoline Prices

Retail gasoline prices dropped sharply by 11.5 cents/gallon to average $2.005/gallon during the week ended March 30th. Prices fell in all PADDs. Retail prices for the current week were a massive 68.6 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 current downhill price slide 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 causing a severe contraction in demand as people shelter-in-place.

For the current week ended March 30th, East Coast PADD 1 gasoline retail prices fell by 10.4 cents to arrive at an average of $1.98/gallon. PADD 1 now joins PADDs 2 and 3 in having retail prices drop below the $2/gallon line. The average price was 63.8 cents/gallon below where it was during the same week last year. Within PADD 1, New England prices dropped by 12.8 cents to average $2.010/gallon. Central Atlantic market prices fell by 8.4 cents, arriving at an average of $2.171/gallon. Prices in the Lower Atlantic market dropped by 11.0 cents to average $1.85/gallon.

In the Midwest PADD 2 market, retail gasoline prices plunged by 13.8 cents to average $1.735/gallon. This was the largest price drop among the PADDs. It also drove PADD 2 prices below the U.S. Gulf Coast PADD 3, a rare occurrence. PADD 2 prices were 27.0 cents/gallon below the average U.S. price during the week ended March 30th. PADD 2 prices for the week were an astonishing 89.1 cents/gallon lower than they were for the same week last year.

In the Gulf Coast PADD 3 market, gasoline prices fell by 9.7 cents to average $1.763/gallon. Two weeks ago, PADD 3 was the first to break the $2/gallon barrier, joined by PADD 2 this week. PADD 3 usually has the lowest average prices among the PADDs, but prices in PADD 2 have fallen sharply over the past two weeks, and PADD 2 prices are now the lowest in the land. PADD 3 prices for the week were a hefty 68.4 cents lower than for the same week last year.

In the Rocky Mountains PADD 4 market, gasoline pump prices dropped by 13.1 cents to settle at an average price of $2.106/gallon. This week’s PADD 4 prices were 36.3 cents lower than at the same time last year.

In the West Coast PADD 5 market, retail gasoline prices fell by 11.9 cents to average $2.759/gallon. Until last week, PADD 5 had been the only PADD where retail gasoline prices had stayed above $3/gallon. Prices this week were 50.6 cents lower than last year’s price. Prices excluding California fell by 12.6 cents to average $2.528/gallon, which was 40.6 cents/gallon below last year’s price. California prices dropped by 11.3 cents to average $2.953/gallon, the last state to fall below the $3/gallon line. On Thursday March 19^th, 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 is causing a dramatic drop in gasoline demand, plus demand for other fuels including jet fuel and diesel. California prices were 57.6 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. four weeks ago, a refinery fire slowed the price decline, but global crude prices have been steadily falling 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.