Analysis by Dr. Nancy Yamaguchi
The Energy Information Administration (EIA) released its weekly data on diesel and gasoline retail prices for the week ended November 27, 2017. At the national level, gasoline prices dropped by 3.5 cents per gallon, while diesel prices increased by 1.4 cents per gallon. Gasoline prices declined in all PADDs. Diesel prices rose in all PADDs, though they declined slightly in the state of California.
WTI prices had a five-week climb that was broken by a price dip during the week ended November 17. However, WTI prices rose strongly during Thanksgiving week, closing at nearly $59/b. These were the highest prices seen since June 2015. Prices have eased this week, and WTI prices are currently in the range of $57.50-$57.75/b. Th market appears to have factored in an extension of the OPEC production cut agreement in advance of the November 30th official meeting in Vienna.
Crude inventories were drawn down by 1.855 mmbbls during the week ended November 17, helping to support crude prices. Product inventories rose slightly. According to the EIA, gasoline inventories rose by 0.044 mmbbls and diesel inventories rose by 0.269 mmbbls. Apparent demand for gasoline and diesel both bounced back after a prior week decline, by 423 kbpd for gasoline and 28 kbpd for diesel. As expected, the Thanksgiving holiday week brought an upsurge in consumption.
For the current week ended November 27, diesel prices rose by 1.4 cent to arrive at an average price of $2.926/gallon. Diesel prices have strengthened enormously since August. Between the week ended August 7 and the week ended November 27th, U.S. diesel prices at the pump rose by a hefty 34.5 cents per gallon.
PADD 1 retail diesel prices rose by 1.1 cents to $2.907/gallon. Within the PADD, New England prices rose by 1.9 cents to average $2.881/gallon. Central Atlantic diesel prices also rose by 1.9 cents, to an average of $3.074/gallon. This submarket has had diesel prices above $3/gallon for the past three weeks. Lower Atlantic prices rose by 0.5 cents to average $2.794/gallon. PADD 1 prices were 46.1 cents/gallon above their prices for the same week last year.
In the Midwest PADD 2 market, retail diesel prices rose by 1.1 cents to average $2.884/gallon, reversing the prior week’s decline of 1.1 cents. Prices were 52.8 cents/gallon above their level for the same week last year.
In the Gulf Coast PADD 3, retail diesel prices increased by 2.3 cents to average $2.712/gallon. This price was 42.2 cents higher than in the previous year.
In the Rocky Mountains PADD 4 market, retail diesel prices rose by 2.3 cents to $3.026/gallon. During the prior week ended November 20, PADD 4 joined PADD 5 in having diesel prices above $3/gallon. This price was 57.6 cents higher than in the prior year.
In the West Coast PADD 5 market, retail prices rose slightly by 0.2 cents to reach an average of $3.380/gallon. This price was 65.3 cents above its level from last year. Prices excluding California rose by 0.6 cents to average $3.113/gallon, which was 47.8 cents above the retail price for the same week last year. California diesel prices relaxed slightly by 0.2 cents to an average price of $3.597/gallon, following the major price surge caused by the November 1 tax hike. This price was 79.7 cents higher than last year’s price. PADD 5 had been the only PADD to have diesel prices above $3 per gallon, but PADD 4 prices also topped the $3/gallon mark over the past two weeks.
U.S. retail gasoline prices dropped by 2.4 cents for the week ended November 27, to arrive at an average price of $2.568/gallon.
For the current week ended November 27, East Coast PADD 1 retail prices for gasoline fell by 2.0 cents to $2.526/gallon. The average price was 35.4 cents higher than last year’s price. Prices eased by 0.7 cents in New England to $2.593/gallon. Central Atlantic market prices declined by 1.2 cents to $2.646/gallon. Prices in the Lower Atlantic market dropped by 3.1 cents, to an average price of $2.415/gallon. This was 34.0 cents higher than last year’s average price for the same week.
In the Midwest PADD 2 market, retail gasoline prices decreased by 2.8 cents to settle at an average price of $2.497/gallon. Gasoline pump prices were 48.3 cents higher than they were one year ago.
In the Gulf Coast PADD 3 market, gasoline prices fell by 1.7 cents to average $2.285/gallon. PADD 3 has the lowest average price among the five PADDs. Prices for the week were 36.7 cents higher than for the same week in 2016.
In the Rocky Mountains PADD 4 market, gasoline pump prices were unchanged at $2.542/gallon. PADD 4 prices were 35.7 cents higher than at the same time in 2016.
In the West Coast PADD 5 market, retail gasoline prices dropped by 3.3 cents to average $3.051/gallon. This was 46.0 cents higher than at the same time a year ago. PADD 5 typically has the highest gasoline prices among the five PADDs, and its retail gasoline prices have been back above $3/gallon for the past three weeks. Excluding California, West Coast prices rose slightly by 0.2 cents to an average of $2.758/gallon. This was 33.6 cents higher than at the same time in 2016. In California, prices dropped by 5.3 cents, arriving at an average pump price of $3.222/gallon. California prices were 53.2 cents per gallon above their levels last year.