Analysis by Dr. Nancy Yamaguchi
The Energy Information Administration (EIA) released its weekly data on diesel and gasoline retail prices for the week ended October 30, 2017. At the national level, gasoline prices fell by a penny per gallon, while diesel prices rose by a penny per gallon. Gasoline prices declined in PADDs 1, 3 and 5, and they rose in PADDs 2 and 4. Diesel prices rose in all PADDs nationwide.
Product prices are responding to continued strength in crude markets. WTI crude prices rose by $1.83/b last week, and they now are in the range of $54-$55/b—the highest prices of 2017. The OPEC production cuts are making inroads into the global supply-demand balance, and Saudi Arabia’s Crown Prince Mohammed bin Salman spoke of continuing the cuts further. Note that the Crown Prince also supports diversifying Saudi Arabia’s economy away from its dependence on petroleum export revenues. In the longer term, a lower production level at a higher per-barrel value supports this direction.
For the current week ended October 30, diesel prices rose by 2.2 cent to arrive at an average price of $2.818/gallon. Diesel prices have been rising steadily since in August.
PADD 1 retail diesel prices increased by 1.4 cents to $2.811/gallon. Within the PADD, New England prices rose by 1.8 cents to average $2.77/gallon. Central Atlantic diesel prices increased by 1.4 cents, to an average of $2.938/gallon. Lower Atlantic prices also rose by 1.4 cents to average $2.729/gallon. PADD 1 prices were 33.6 cents/gallon above their prices for the same week last year.
In the Midwest PADD 2 market, retail diesel prices increased by 3.1 cents to average $2.81/gallon. This was the largest price hike among the five PADDs. Prices were 36.7 cents/gallon above their level for the same week last year.
In the Gulf Coast PADD 3, retail diesel prices rose by 2.5 cents to average $2.639/gallon. This price was 28.6 cents higher than in the previous year.
In the Rocky Mountains PADD 4 market, retail diesel prices rose by 2.6 cents to $2.943/gallon. This price was 40.2 cents higher than in the prior year.
In the West Coast PADD 5 market, retail diesel prices increased by 1.3 cents to an average of $3.111/gallon. This price was 34.5 cents above its level from last year. Prices excluding California rose by 0.5 cents to $3.02/gallon, which was 36.5 cents above the retail price for the same week last year. California diesel prices rose by 1.9 cents to an average price of $3.185/gallon, 33.0 cents higher than last year’s price. PADD 5 typically has the highest fuel prices in the country, and it remains the only PADD to have diesel prices above $3 per gallon despite the gradual increase in nationwide prices.
U.S. retail gasoline prices rose by 0.9 cents for the week ended October 30, to arrive at an average price of $2.488/gallon. The price spike caused by Hurricane Harvey had eased by over 18 cents per gallon, but rising crude prices are finally filtering into the gasoline market. Also, the EIA reported that apparent gasoline demand during the week ended October 20 rose by 178 kbpd.
For the current week ended October 30, East Coast PADD 1 retail prices for gasoline edged up by 0.01 cents to $2.448/gallon. The average price was 22.9 cents higher than last year’s price. Prices decreased by 0.9 cents in New England to $2.553/gallon. Central Atlantic market prices rose by 1.4 cents to $2.553/gallon. Prices in the Lower Atlantic market fell by 0.7 cents, to an average price of $2.337/gallon. This was 16.5 cents higher than last year’s average price for the same week.
In the Midwest PADD 2 market, retail gasoline prices rose strongly during the week, increasing by 3.3 cents to average $2.427/gallon. This was by far the largest price hike among the five PADDs. Gasoline pump prices were 35.2 cents higher than they were one year ago.
In the Gulf Coast PADD 3 market, gasoline prices fell by 1.1 cents to average $2.215/gallon. PADD 3 has the lowest average price among the five PADDs. Prices for the week were 17.3 cents higher than for the same week in 2016.
In the Rocky Mountains PADD 4 market, gasoline pump prices decreased by 1.4 cents, to average $2.515/gallon. This was the largest price drop among the five PADDs. PADD 4 prices were 22.2 cents higher than at the same time in 2016.
In the West Coast PADD 5 market, retail gasoline prices increased slightly by 0.3 cents to average $2.928/gallon. This was 23.1 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 had been above $3/gallon until October. Excluding California, West Coast prices rose by 0.1 cents to an average of $2.688/gallon. This was 21.0 cents higher than at the same time in 2016. In California, prices rose by 0.2 cents, arriving at an average pump price of $3.066/gallon. California was the only state to have average prices reported at above $3 per gallon.