The U.S. Energy Information Administration (EIA) released its weekly data on diesel and gasoline retail prices for the week ended October 7, 2019. Diesel prices declined, while gasoline prices edged up slightly. On a national average basis, retail prices for gasoline rose by 0.3 cents/gallon for the week, driven up largely because of refinery issues in California. National average prices for gasoline were 25.8 cents/gallon below where they were in the same week one year ago. On a national average basis, retail prices for diesel fell by 1.9 cents/gallon. National average prices for diesel were 33.8 cents/gallon lower than they were in the same week last year.
Futures Prices and Retail Price Outlook
During the week from September 30th-October 4th, 2019, West Texas Intermediate (WTI) crude futures prices dropped by $4.25/barrel (7.5%.) Gasoline futures prices fell by 6.87 cents/gallon (4.3%.) Diesel futures prices fell by 7.43 cents/gallon (3.8%.) The global market appears well-supplied, with full restoration of Saudi Arabian production capacity and signs of economic cooling that are driving down forecasts of oil demand. Although the relationship between futures prices and retail prices is not immediate or one-for-one, retail prices are likely to ease in the coming week, though the refinery problems in California have caused a major runup in West Coast prices.
Retail Diesel Prices
For the current week ended October 7, retail diesel prices fell by 1.9 cents to arrive at an average price of $3.047/gallon. Retail diesel prices had been below the $3/gallon mark until the attacks on Saudi Arabia, and they now appear to be heading back down toward that level. 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. The month of May brought a modest reversal in the upward trend in diesel prices. During the five weeks of June including the week ended July 1st, diesel prices fell more substantially, declining by 10.9 cents/gallon. For the current week ended October 7, diesel prices fell in all PADDs, though they rose modestly in California. The national average price for the week was 33.8 cents/gallon below where it was during the same week last year.
In the East Coast PADD 1, diesel prices decreased by 2.4 cents to arrive at an average price of $3.041/gallon. Within PADD 1, New England prices fell by 0.9 cents to average $3.047/gallon. Central Atlantic diesel prices declined by 1.4 cents to average $3.224/gallon. Lower Atlantic prices fell by 3.3 cents to settle at an average price of $2.915/gallon. PADD 1 prices were 31.9 cents/gallon below their prices for the same week last year.
In the Midwest PADD 2 market, retail diesel prices fell by 2.0 cents to average $2.967/gallon. Prices were 38.4 cents/gallon below their level for the same week last year. This is the largest year-on-year price drop among the PADDs. PADD 2 joined PADD 3 during the week ended June 17 in having diesel prices fall below $3/gallon. These two PADDs are the only ones with prices remaining below the $3/gallon mark.
In the Gulf Coast PADD 3, retail diesel prices fell by 2.3 cents to average $2.804/gallon. PADD 3 typically has the lowest diesel prices among the PADDs. Prices were 36.5 cents lower than for the same week in the previous year.
In the Rocky Mountains PADD 4 market, retail diesel prices declined by 1.0 cent to average $3.022/gallon. PADD 4 prices were 36.8 cents lower than for the same week in the prior year.
In the West Coast PADD 5 market, retail diesel prices edged down by 0.3 cents to settle at an average of $3.642/gallon. PADD 5 prices were 22.4 cents below their level from last year. Prices excluding California fell by 1.3 cents to arrive at an average of $3.215/gallon. This price was 34.3 cents below the retail price for the same week last year. California diesel prices rose by 0.5 cents to arrive at an average price of $3.981/gallon. Until the week ended June 24th, California had been the only major market where diesel prices were above $4/gallon, where they had remained for nine weeks. Prices are re-approaching the $4/gallon mark, though it is possible that settling the refinery issues will cause prices to stop their upward trajectory. California diesel prices were 13.0 cents lower than they were at the same week last year.
Retail Gasoline Prices
U.S. retail gasoline prices rose modestly by 0.3 cents/gallon to reach an average of $2.645/gallon during the week ended October 7. Prices fell in PADDs 1 and 3 while rising in PADDs 2, 4 and 5. Retail prices for the current week were 25.8 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 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.
During the first three weeks of July, gasoline prices rose by 12.5 cents/gallon. This outpaced the increases in crude oil and diesel prices mainly because of the explosion and fire at the 335,000-bpd, gasoline-maximizing Philadelphia Energy Systems (PES) refinery. Tropical Storm Barry then caused an uptick in prices. Subsequently, prices began to relax, and they fell for eight consecutive weeks beginning with the week of July 22, yielding a total price drop of 20.0 cents/gallon.
For the current week ended October 7th, East Coast PADD 1 retail prices for gasoline fell by 2.0 cents to average $2.486/gallon. The average price was 34.2 cents/gallon below where it was during the same week last year. Within PADD 1, New England prices fell by 3.0 cents to average $2.523/gallon. Central Atlantic market prices fell by 2.6 cents to average $2.612/gallon. Prices in the Lower Atlantic market fell by 1.4 cents to settle at an average of $2.397/gallon.
In the Midwest PADD 2 market, retail gasoline prices bounced back by 1.1 cents to average $2.499/gallon. PADD 2 prices have been volatile in recent weeks. PADD 2 prices for the current week were 32.3 cents/gallon lower than they were for the same week last year.
In the Gulf Coast PADD 3 market, gasoline prices fell by 4.4 cents to average $2.282/gallon. This was the largest price drop among the PADDs. PADD 3 continues to have the lowest average prices among the PADDs, currently 36.3 cents/gallon below the average U.S. price. Prices for the week were 34.4 cents lower than for the same week last year.
In the Rocky Mountains PADD 4 market, gasoline pump prices rose slightly by 0.3 cents to reach an average price of $2.712/gallon. This week’s prices were 28.7 cents lower than at the same time last year.
In the West Coast PADD 5 market, retail gasoline prices surged by 9.5 cents to hit an average of $3.642/gallon. This price increase built on last week’s price hike of 21.0 cents. Problems were reported at several key refineries in California, including Valero’s Benicia refinery, Chevron’s El Segundo refinery, and PBF’s Torrance refinery. Over the past month, malfunctions also reportedly occurred at Marathon’s and Phillips 66’s refineries in Los Angeles. PADD 5 continues to have the highest gasoline prices among the five PADDs. It is the only PADD where retail prices exceed $3/gallon. It also is the only PADD where prices are higher than they were last year: This week’s prices were 16.7 cents above where they were during the same week in 2018. Excluding California, West Coast prices increased by 4.4 cents to average $3.101/gallon. This price was 8.6 cents lower than at the same time last year. In California, pump prices jumped by 13.8 cents (following last week’s price hike of 34.0 cents) to average $4.091/gallon. California prices were 38.4 cents per gallon above their levels from the same week last year. It is the only major U.S. submarket where prices are higher than they were one year ago. During the current week ended October 7th, Los Angeles retail prices averaged $4.098/gallon and San Francisco retail prices averaged $4.10/gallon, the only major cities where prices have surged past the $4/gallon level.