Analysis by Dr. Nancy Yamaguchi

Overview

The U.S. Energy Information Administration (EIA) released its weekly data on diesel and gasoline retail prices for the week ended May 13, 2019. The upward price trend finally reversed. On a national average basis, retail prices for gasoline fell by 3.1 cents/gallon. Retail diesel prices fell by 1.1 cents/gallon. National average prices for gasoline are 0.7 cents/gallon below where they were in the same week one year ago. National average prices for diesel were 7.9 cents/gallon lower than they were in the same week last year.

Futures Prices and Retail Price Outlook

During the week May 3-May 10, 2019, West Texas Intermediate (WTI) crude futures prices rose modestly by $0.09/b (0.1%.) Gasoline futures prices decreased by 3.95 cents/gallon (2.0%.) Diesel futures prices fell by 2.41 cents/gallon (1.2%.) 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 ease in the coming week.

Retail Diesel Prices

For the current week ended May 13th, retail diesel prices decreased by 1.1 cents to arrive at an average price of $3.160/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. For the current week ended May 13th, diesel prices fell in all PADDs except for the West Coast PADD 5. The national average price fell to 7.9 cents/gallon below where it was during the same week last year.

In the East Coast PADD 1, diesel prices declined by 1.4 cents/gallon to reach an average price of $3.176/gallon. Within PADD 1, New England prices decreased by 0.7 cents to average $3.238/gallon. Central Atlantic diesel prices fell by 1.4 cents to average $3.365/gallon. Lower Atlantic prices fell by 1.6 cents/gallon to reach an average price of $3.035/gallon. PADD 1 prices were 6.0 cents/gallon below their prices for the same week last year.

In the Midwest PADD 2 market, retail diesel prices fell by 1.8 cents to average $3.046/gallon. Prices were 12.9 cents/gallon below their level for the same week last year.

In the Gulf Coast PADD 3, retail diesel prices fell by 2.2 cents to average $2.905/gallon. PADD 3 typically has the lowest diesel prices, and it is the only PADD where retail diesel prices are below the $3/gallon mark. Prices were 10.7 cents lower than for the same week in the previous year.

In the Rocky Mountains PADD 4 market, retail diesel prices eased by 0.5 cents to reach an average of $3.181/gallon. PADD 4 prices were 13.5 cents lower than for the same week in the prior year.

In the West Coast PADD 5 market, retail diesel prices rose by 2.5 cents to average $3.790/gallon. This was the only price increase among the PADDs. PADD 5 prices were 5.9 cents above their level from last year. Prices excluding California increased by 1.0 cents to arrive at an average of $3.355/gallon. This price was 12.7 cents below the retail price for the same week last year. California diesel prices rose by 3.9 cents to arrive at an average price of $4.136/gallon. California is the only market for which prices have risen above $4/gallon, and prices have been above $4/gallon for the past four weeks. California diesel prices are 20.7 cents higher than they were at the same week last year.

 

Retail Gasoline Prices

U.S. retail gasoline prices fell by 3.1 cents to average $2.866/gallon during the week ended May 13th. Prices rose in all PADDs except for PADD 4. Retail prices for the current week declined to 0.7 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 14 weeks in a row, shedding a total of 66.6 cents per gallon. In the next 17 weeks since then, prices marched back up by 66.0 cents/gallon. Prices came very close to the peak they hit in early October, before the recent price easing.

Gasoline prices have been volatile in many local markets. The upward trend began with increasing crude oil prices. Localized price hikes were accentuated by the switch to summer grades, refinery issues, and flooding in the Midwest, which disrupted ethanol supply and transportation. The current weakening of futures prices should continue to exert downward pressure on gasoline prices in the coming week.

For the current week ended May 13, East Coast PADD 1 retail prices for gasoline fell by 3.8 cents to average $2.754/gallon. The average price was 6.6 cents/gallon below where it was during the same week last year. Within PADD 1, New England prices declined by 2.1 cents to average $2.839/gallon. Central Atlantic market prices decreased by 1.7 cents to average $2.912/gallon. Prices in the Lower Atlantic market dropped by 5.5 cents to average $2.635/gallon.

In the Midwest PADD 2 market, retail gasoline prices fell by 2.9 cents to reach an average price of $2.738/gallon. PADD 2 prices for the current week were 4.4 cents/gallon lower than they were for the same week last year.

In the Gulf Coast PADD 3 market, gasoline prices fell by 3.9 cents to average $2.518/gallon. PADD 3 continues to have the lowest average prices among the PADDs. Prices for the week were 9.5 cents lower than for the same week last year.

In the Rocky Mountains PADD 4 market, gasoline pump prices rose by 4.5 cents to arrive at an average price of $2.919/gallon. This was the only price increase among the PADDs. Prices have been rising rapidly in PADD 4. This week’s prices were 4.2 cents higher than at the same time last year.

In the West Coast PADD 5 market, retail gasoline prices declined by 1.7 cents to arrive at an average of $3.69/gallon. PADD 5 continues to have the highest gasoline prices among the five PADDs. Excluding California, West Coast prices rose by 1.0 cents to average $3.356/gallon. This price was 19.0 cents higher than at the same time last year. In California, pump prices fell by 3.8 cents to average $3.968/gallon. California average prices had exceeded $4/gallon the prior week. California prices are now 36.9 cents per gallon above their levels from the same week last year.